Prayers—Read by the Lord Bishop of Southwell.

Viscount Eccles: having received a Writ of Summons in accordance with Standing Order 10(3) (Hereditary Peers; by-elections) following the death of Lord Aberdare—took the Oath.

Tributes to the late Lord Callaghan of Cardiff

Baroness Amos: My Lords, during the Easter Recess, we lost one of the most remarkable Members of this House, Lord Callaghan of Cardiff. I rise to pay tribute to him and I am deeply proud to do so. As well as being a former Prime Minister, he held the distinction of having held all four of the great offices of state; something that noble Lords will agree is unlikely to be repeated.
	It is difficult to improve on the tributes paid to him last week by Prime Ministers past and present. Sir Edward Heath said:
	"We have lost a major figure from our political landscape".
	The noble Baroness, Lady Thatcher, described him as "a formidable opponent" and my noble friend the Prime Minister spoke of,
	"a giant of the Labour movement ... he worked tirelessly to put into action the values of social justice, solidarity and opportunity for all which brought him into politics and the Labour Party".
	However, Lord Callaghan was more than a political heavyweight. He was also a loving father, grandfather and great-grandfather, a beloved husband and a cherished friend. As noble Lords will know, Lord Callaghan's wife of 67 years, Audrey, died just a few days before he did. We all remember his selfless devotion to her. Our thoughts are of course with the family at this difficult time and I know that I speak for the whole House when I say that we are thinking in particular of their daughter, my noble friend Lady Jay of Paddington.
	Leonard James Callaghan was born in Portsmouth in 1912. The son of a Royal Naval Chief Petty Officer, his father died when James was just nine. He was educated at Portsmouth Northern Grammar School and in 1929 he joined the Civil Service as a clerk in an Inland Revenue office in Maidstone. It was around this time that he met Audrey and became a trade unionist, joining the Labour Party in 1931. Having become a full-time union official with the Inland Revenue Staff Federation, he volunteered with the Royal Navy during the Second World War, serving with the East Indies fleet and later being commissioned as a lieutenant in the Royal Naval Volunteer Reserve.
	After the war, Lord Callaghan's political career stepped up a pace. His 42-year association with the parliamentary seat of South Cardiff began when he was elected to Parliament in Labour's landslide election victory in 1945. By 1947, he had been promoted to the Front Bench as Parliamentary Secretary, Ministry of Transport. He subsequently served the Attlee government as Parliamentary and Financial Secretary to the Admiralty and although Labour returned to opposition in 1951, his career continued to flourish as a Front-Bench spokesperson.
	When Harold Wilson's government was formed in 1964 he was named Chancellor of the Exchequer. In that capacity, he introduced corporation and capital gains taxes, but he left the Exchequer in 1967 when he was forced to devalue the pound, moving to become Home Secretary in a straight swap with the late Lord Jenkins.
	He was a well regarded Home Secretary, winning admirers on all sides. With the situation in Northern Ireland taking up much of his time, he was described by my noble friend Lord Healey as having dealt with the issue with,
	"incomparable skill and understanding, both on the spot and in Westminster".
	During his career at the Home Office he also introduced the Race Relations Act 1965, but defeat for Labour in the 1970 election meant another period in opposition.
	In Harold Wilson's second government in 1974, Lord Callaghan became Foreign Secretary, working on such issues as world poverty and Britain's relationship with the rest of Europe—topics very familiar to this House today.
	In 1975, he played a key role in the referendum on membership of the European Community and when Harold Wilson resigned in 1976, he was the favourite to succeed him. So it was, on 5 April, 1976 that James Callaghan became Prime Minister, apparently exclaiming at the time:
	"Prime Minister, and I never went to university!".
	His period at No. 10 was a challenging time. With the economy in trouble, his government had to secure the passage of unpopular cuts in government spending. His political skills were such that he was able to persuade a majority of his Cabinet to support his Chancellor, my noble friend Lord Healey, who later praised the,
	"consummate skill with which he handled the Cabinet".
	Lord Callaghan was popular with the people. His candid straight speaking appealed to them, and he oversaw a revival in Labour's fortunes. As we know, it was not enough and in March 1979 his government were brought down by a vote of no confidence. Lord Callaghan remained Labour leader in opposition for 18 months and in 1983 became Father of the House. He retired from the House of Commons in 1987, was appointed a Knight of the Garter in April and created a life Peer.
	I know that we will all agree that this snapshot of Lord Callaghan's life cannot fully reflect a truly remarkable life. He was passionate about his politics, not least about the right to a decent education, but he was also a tough, practical, calm leader, vastly experienced and candid. With Lord Callaghan's passing this House has lost a great man—a man who served his country with distinction but who was also a family man. I do not think that we shall see his like again.

Lord Strathclyde: My Lords, it is a privilege to follow the noble Baroness the Leader of the House in her just tribute to the late Lord Callaghan of Cardiff. People will remember Lord Callaghan above all as a decent, patriotic commonsensical man, ready to tell uncomfortable truths if needed and to face the consequences if he believed the cause was right.
	The public instinctively liked and respected the man they knew as Jim. Millions in the Wales he loved and right across Britain heard of his death with great sadness. In the age of modern politics, focus groups, image and spin, his straightforward qualities seem to recall another era. Lord Callaghan was in Parliament for well nigh 60 years, 42 as a Member of Parliament for Cardiff South. As the noble Baroness the Leader of the House said, he was the only person ever to hold the four great offices of state: Home Secretary, Foreign Secretary, Chancellor of the Exchequer and Prime Minister. That is a record unlikely ever to be equalled.
	In all those offices he faced enormous challenges—in the 1960s a struggle for the pound that ended in devaluation against a background of relative economic decline, and in the 1970s renegotiation of our relationship with the EU. But in good times and bad he conducted himself with great political skill and integrity, never more perhaps than when he took a difficult decision to commit troops to Northern Ireland, or when, far ahead of most in the Labour movement, he saw that Britain could not spend its way out of problems and that wages could not run ahead of increases in national prosperity. That realisation and his typically blunt statement of it framed his term as Prime Minister.
	When he eventually fell from government it was a sad end to a period in which he served this country with great distinction as Prime Minister, not least because he realised the limitations on that office and did not try to back-seat drive every part of government.
	Lord Callaghan did not join us in this House until 1987, but we miss him and his wise interventions from his usual place in this House. Many on all sides of the House had good reason to be grateful for his kindness and the voice of his unparalleled experience, not least on the Copyright, Designs and Patents Act in the late 1980s when he championed and was successful in getting the government to agree to an amendment to extend the copyright on Peter Pan to the benefit of the Great Ormond Street Children's Hospital.
	Lord Callaghan knew great poverty in childhood and great distinction in old age but it did not change him. He held by lifelong principles. He dealt as he found, meant what he said and said what he meant. He loved this country he served so faithfully in war and peace—the last Prime Minister, we must all hope, ever to serve in wartime. He loved the countryside, his beloved farm in Sussex, his family and the values that go with that, living to relish grandchildren and great grandchildren and supported by all his family, not least the noble Baroness, Lady Jay of Paddington, to whom the whole House will extend the sincerest sympathy.
	That sympathy is the deeper because of the recent loss also of Lady Callaghan, to whom I add my own tribute. Together they shared some 67 years of married life and were separated in death by just 11 days. Lady Callaghan, too, had a deep well of goodness, decency, humanity and sincerity. In these qualities Lord and Lady Callaghan were two sides of the same coin. The metal of that coin was gold. This House and this country will long remember them.

Lord McNally: My Lords, the noble Baroness the Lord President of the Council and the noble Lord the Leader of the Opposition have very eloquently expressed memories of Lord Callaghan as a "statesman", as the House magazine heads him today. Looking around this House, I am well aware that we also mourn him today as a colleague and a friend.
	I had the honour of working for Lord Callaghan as his political secretary for nine years. I never liked the term "political adviser"; I thought it was absurd, rather like saying that you were dancing adviser to Nijinsky, or golfing adviser to Jack Nicklaus. I prefer "political secretary". They were nine wonderful years of my life. I always remember that he had a massive fund of Hugh Dalton stories. I remember saying to him, "You realise that in 30 years' time I will have a whole fund of Jim Callaghan stories". "Oh no, Dalton was a giant", he said. But of course, as the Prime Minister so rightly said, so was Jim Callaghan.
	Perhaps I can give a flavour not only of what an honour it was to work for him, but what good fun it was. In the early 1970s, we went together to Vietnam to meet President Thieu, then president of South Vietnam and something of a controversial figure both in his own country and back here in Britain. After the meeting, we had a press conference and Mr Callaghan, as he then was, was asked by the South Vietnamese press what he thought of President Thieu. He said, "He would make an excellent member of the National Executive of the Labour Party". That satisfied the South Vietnamese press, which did not probe him further about his opinion of the national executive of the Labour Party.
	I also remember going with him during the renegotiations on Europe. The meeting started some time in the morning, and as those European meetings tend to do, it went long into the evening. At about 11 p.m. Mr Callaghan signalled that he wished to speak, and he was called by the chairman. He opened with an absolute eulogy of his Minister of State, Mr Hattersley—now the noble Lord, Lord Hattersley. He praised Mr Hattersley's eloquence, his grasp of his brief, his shrewdness, his toughness and his ability. Then he concluded, "And that is why I have every confidence that I can now go to bed and leave it to him". I could go on; there are hundreds of stories, I assure you.
	I was also struck by the fact that, among those from not only the Labour side but all sides of the House, he was part of that generation who had been scarred by the 1930s and then by the horrors of the Second World War, and who came back to win the peace, saying, "Never again". Those experiences very much formed his political life. He was a politician. Sometimes people find that "politician" is a rather pejorative term. He was a politician in every sense; he knew how to take knocks and to give them. He did not find smoke-filled rooms overly oppressive; he knew how to work the machine and he saw nothing wrong with that because for him politics was for a purpose. In trying to pick out things in that career as I knew it, the IMF negotiations were referred to. When the papers are published it will be a case study of what good Cabinet government should be. He immensely strengthened Cabinet government and its process during his time in office.
	My final comment about him also involves Lord Whitelaw. During the first election of 1974, I was travelling the country and the marginals with Jim Callaghan in a rather large limousine that the Co-op funeral service had provided. We stopped somewhere in the East Midlands for a cup of tea at a hotel, and about two or three minutes later in came Willy Whitelaw with a protection officer and someone else—we all travelled with smaller entourages in those days. Jim got up, walked across to him, came back to me and said, "I hope you don't mind, but Willy and I are going to have a pot of tea together". I have often thought when people think of the rivalry of politics that in the midst of a rather bitter and divisive election those two great statesmen were sat in the corner of an English hotel having a pot of tea and talking together before they went off to their respective campaigns.
	In a way, Willy also ends this tribute. I have many memories of him, one of which dates from just after I came into the House in 1996 and the Conservatives were in trouble over the Broadcasting Act. Lord Whitelaw did not come often to the House in those days but he did attend for a crucial debate and vote. He made an impassioned speech from those Benches up there in support of the government position. He sat down to general approval, and Lord Callaghan stood up and pursed his lips. He looked round for quite some time, and said, "Well, we always know when they're in trouble, don't we?". He had the House with him. Reading all the tributes, strangely enough it was his old nemesis, Mrs Thatcher, who got it right. He was a patriot and he was a parliamentarian. He is somebody I will miss very much.

Lord Williamson of Horton: My Lords, on behalf of the Cross-Bench Peers I join in the warm tributes to the late Lord Callaghan of Cardiff. His was indeed a remarkable achievement: he was not only Prime Minister at a very difficult period in the nation's affairs but, during a long life at the heart of national government, he held the major offices of state as Chancellor of the Exchequer, Home Secretary and Foreign Secretary. It demonstrates his capacity to command the support of not only the British public but his political colleagues, who held a wide range of different views, within a system of Cabinet government—not an easy task.
	I sometimes think that we do not have much foresight in public life, but recently I think that we may have not too much hindsight. We should recall that during much of his life in the highest offices of state Lord Callaghan faced serious difficulties, in particular those resulting from the weakness of the economy, which could not be turned round quickly. His achievements must be seen in that context. What decisions could have been more difficult in the circumstances of that time than the value of the currency, the defence of the prices and incomes policy, serious problems of security in Northern Ireland and the protection of the interests of the communities there, the timing of the decisions on immigration from east Africa, or the timing of the renegotiation referendum on Europe? They were indeed difficult decisions for which he took important responsibilities.
	I was in the British public service during much of the time that Lord Callaghan held power, and he was a firm believer in the integrity and independence of the Civil Service both in practice and later in powerful speeches in this House. I believed strongly then, as I do now, in Lord Callaghan's commitment to public service and the national interest. As Cross-Benchers who are independent of politics and do not even have a vote in the general election, and in the presence of the noble Baroness, Lady Jay, we honour that commitment today.

The Lord Bishop of Southwell: My Lords, I associate the Bishops' Bench with the tributes that have been paid by all sides of the House today.
	We have heard and read a little in recent days of the substantial and controversial matters of state with which Lord Callaghan engaged in his long and distinguished career. On these Benches, we recall a matter of state and controversy of our own, in Lord Callaghan's robust defence of his right as Prime Minister to choose diocesan Bishops. He did so in the face of the resolution of the General Synod of the Church of England that the Church should have the decisive voice. The then Prime Minister told the other place that, as Archbishops and Bishops sit in this Chamber, our nomination remained a matter for the Prime Minister's concern. However, he proceeded to work with the late Lord Coggan, then Archbishop of Canterbury, and the late Sir Norman Anderson to negotiate a compromise. The 1976 concordat agreement between Church and state survives in large part to this day as one example of a relationship that is both enduring and evolving.
	Of more human interest, we have learned a little of that great strength of partnership between Jim and Audrey Callaghan, which began when they met as Sunday school teachers all those years ago. We are also aware of the unwavering devotion with which he cared for Audrey as she slipped away into the shadows of her illness—a devotion that is both an inspiration and, I believe, an example to us all. From this Bench, I offer my prayers and condolences to the noble Baroness, Lady Jay, to Julia and to Michael, who have lost not only one but both parents in such a short period of time; and to the rest of the wider family.

Lord Clinton-Davis: My Lords, I would like to speak rather briefly about one facet of Jim Callaghan's life. He was always interested in things maritime, as one might expect from somebody who was born in Portsmouth. After his service in the Royal Navy, he formed the Advisory Committee on Protection of the Sea in 1952. He remained interested in ACOPS until days before his death, when he recommended his son Michael to be a member of its executive committee. That was utterly remarkable.
	I was very proud to serve as a Minister in his government. I thought that he was a great Prime Minister, and chairman and later president of ACOPS itself. Our thoughts go out to all his family, particularly to the former leader of the government party in this House, Margaret—the noble Baroness, Lady Jay.
	I liked Jim. He had faults, of course. He even thought that my playing of golf was reprehensible, as he indicated to my wife on the telephone. One thing that I remember most about him was that, every three or four months, junior Ministers—Ministers of State and Parliamentary Under-Secretaries—convened in a meeting that he chaired, and you could talk about anything except your own department.
	All in all, I thought that he was a wonderful human being. We in this House will certainly miss him. I convey my belief that his partnership in marriage was perfect; he always thought about Audrey. Margaret, we think of you at this moment.

Lord Renton: My Lords, although so much has already been said about Lord Callaghan, I wonder whether I might add a few words, because he and I were elected to the other House in 1945. We were elected to different parties but—I cannot remember how it happened—we became friends at an early stage. I thought that he was a very likeable man, and he turned out to be very open-minded. I was a political opponent, but he always wanted to know what views one had and one's friends had. Over the years, his mind broadened by taking in as much information as he could from not only his parliamentary friends, but his political opponents.
	One thing brought us rather close together when we had been in Parliament only a few years—our common interest in transport. I held a humble position as secretary to the Conservative transport committee when he became Parliamentary Secretary at the Ministry of Transport. Far from that turning us into controversial political opponents, it brought us closer together. Privately he would very often ask my opinion about one thing or another to do with transport.
	Over many years, I grew in greater admiration for him, because the great variety of responsibilities placed on him in his various parliamentary offices meant that he had to open his mind still further and adapt it as was required. He never failed in any of the important posts for which he was given responsibility. He was greatly admired right across the House of Commons at that time and, I have no doubt, in your Lordships' House.
	I take the liberty of paying my tribute because, when he departed, he and I were the longest-serving Members of both Houses. We had both been here for nearly 60 years. Mind you, two hereditary Peers have served in Parliament even longer. One is my noble friend Lord Jellicoe, who I am glad to say has his 87th birthday today—nice young fellow—and then there is the noble Lord, Lord Carrington.
	For those of us who knew Jim Callaghan from the start of his parliamentary life, it has been a great joy to have his daughter here. One does not always agree with her, but one is glad that she is here and admires her efforts.
	In my long life, I have found that Jim Callaghan was not only one of the most interesting and friendly men I have known, but one of those conscientious men who wanted to obtain other people's opinions to a very great extent. I was delighted when we became close enough friends for him and Lady Callaghan to attend two charitable concerts that I had organised.
	In Parliament, over the many years that many of us have been here, there has been a lot of talent. People have varied enormously. But of all those that we have known, few have reached the distinctions of one kind or another that he did, and fulfilled them so much in the national interest.

Lord Acton: My Lords, the last proper conversation that I had with Lord Callaghan was at the Long Table. During lunch, he said, "You know, when you reach my age, all that really matters are the grandchildren and the great-grandchildren". I thought how wonderful it must be to be really grown up.

Lord Morgan: My Lords, I should briefly like to say a few words, because I had the privilege of writing Lord Callaghan's autobiography—

Noble Lords: Oh!

Lord Morgan: My Lords, I should have said, biography. It occupied some eight years of my life, and it was the most interesting thing that I have ever done. It was a biography, not an autobiography. He was a strong man to talk to and a tough man. If someone has written their autobiography, which is, no doubt, what I had in my mind, you have to jolt or unsettle them in some way and that could be quite exciting. I recall immigration and devolution as two topics that produced a certain amount of excitement.
	Lord Callaghan was also very human and very aware of his own experiences, which gave him a great depth of sympathy with the sufferings of others, including, perhaps I may say, myself and my children when I was writing the book. He was very aware of someone who had lost his parents at a young age.
	He was a complex man with a great range of interests and experiences—one of them being rugby football. He played in the second row for Streatham. He was proud of that, and I am happy to say that when he talked about rugby football and spoke about "we", he meant the Welsh—not the English—rugby team. He was a man with roots. He was rooted in Portsmouth. He was rooted in noncomformity, the Navy, the trade unions, the Labour Party and in this country. He was interested in British history, and he liked talking about it—in particular, the history of the Navy. He was interested in the fact that one of my antecedents fought at Trafalgar, which is a matter of some current concern.
	He was a man whose ideas could evolve and grow with events. That was true of his views on Europe, on Northern Ireland and many other topics. In many ways, he was a conservative and cautious man, but one who could also take extraordinary and dramatic leaps in executive action. So I think of him as being a big man. The bigger the person that I spoke to, the bigger the respect that they had for Lord Callaghan.
	I discovered a quote from Robert Blatchford, a famous socialist editor, about William Morris. It states:
	"Strike at him where you would, he rang true".
	Jim Callaghan always rang true, and I mourn his memory.

Baroness Jay of Paddington: My Lords, this has been a very proud afternoon for me, and I am profoundly grateful to your Lordships for the warm tributes and wonderful memories that have been expressed from every part of the House. Noble Lords have rightly reflected the extraordinarily full and, indeed, fulfilled life that my parents shared and enjoyed over such a long period.
	As you can imagine, over the past week, all of my family have received some extraordinary letters from all over the country and from all over the world. They range from letters and greetings from international statesmen to the Ukrainian parents of a young student who studied engineering at Swansea University—a "child of Chernobyl", as he was called—who my father quietly supported there. As my noble friend Lord Carter reminded me, I must not forget the condolences from the organisers of the Sussex County Ploughing Championships, because, as the noble Lord rightly reminded me, my father's greatest prize among many was often the fact that he won the local wheat-growing championship.
	Of course, it was in this Chamber and in another place that his political life was centred, as noble Lords have recalled. For 60 years the Palace of Westminster was a second home. So, it is as a parliamentarian that he would have particularly valued and been pleased to have heard the wonderful things that noble Lords have said. As noble Lords know and have referred to, it was concern for my mother that kept him from his familiar place on this Bench over the past few years of this Parliament. Nevertheless, you were never far from his thoughts. He read the Government Whip every week, studied Hansard assiduously and often cross-questioned me about the individual speakers. It would be fair to say that, as time went on, his judgments of performance became slightly more mellow.
	He was immensely touched when, last February, the House noted that he had become the longest-living former Prime Minister. His interest in international affairs, especially in Africa, has been referred to and was always active and involved. In the very last batch of letters that he and I chatted about on the day before he died was a report from the parliamentary Zambia Society Trust, which had sent to him a newsletter recalling a visit that he had made to the Central African Federation in 1957 and about which he had written to the trust. My noble friend Lady Amos will be pleased to hear that even in 1957 he was urging the improved education of women in Zambia.
	As many noble Lords will know, my father never lived in the past. In the last few weeks, he was already talking about how he would come on the opening day of the next Parliament to take the Oath. He was looking forward to a good crop of raspberries in his Sussex garden in July.
	Tomorrow, as noble Lords have said, will be 5 April. It may be the beginning of a new general election campaign. It will mark the 29th anniversary of the day that he became Prime Minister. I hope that tomorrow and in the future we will all remember one of his most often quoted remarks:
	"You may never reach the promised land, but you can certainly march towards it".
	My Lords, thank you very much.

Nuclear Generation

Lord Peyton of Yeovil: asked Her Majesty's Government:
	For how long they propose to continue to keep the option for nuclear generation open and what is the annual cost to public funds of doing so.

Lord Sainsbury of Turville: My Lords, the Government have not set a time limit on keeping the nuclear generation option open. We remain committed to the goals set out in the 2003 energy White Paper, and we continually review progress against them, for example, in the light of the latest information on the costs, technological developments and environmental impact of different energy sources.
	To keep the nuclear option open, research council expenditure will provide new opportunities for nuclear fission research worth up to £6 million over four years. EPSRC is providing £1 million for a nuclear technology education consortium to provide masters level and professional development training for the nuclear industries, and the DTI expects to provide funding of up to £5 million per annum for UK participation in international research collaboration on advanced nuclear reactor systems.

Lord Peyton of Yeovil: My Lords, I shall have to examine that lengthy Answer with care, just to see whether there was anything new in it—but I have the impression that we have heard most of it before.
	I do not suppose that the noble Lord would agree with me, but am I right in thinking that perhaps the two right honourable ladies with whom he is acquainted, who are responsible for electricity supply, have become slightly unnerved by the prospect of a general election, with the result that they have not—for the moment, at any rate—the courage to tell the British people the truth that long, vulnerable pipelines and wind are neither safer nor more secure than nuclear would be? It is time that we got on with that option.

Lord Sainsbury of Turville: My Lords, when the noble Lord asks a new question, I shall give him a new answer. I do not believe that my right honourable friends are unnerved. They have set out a clear strategy for the future. As I said, we will review the matter as we go along. If at any time it is necessary to change that strategy, we will do so.

Lord Forsyth of Drumlean: My Lords, what have the Government learnt that is new from the publication of the report on the methods of disposal of nuclear waste? Am I growing old and cynical in thinking that this is just yet another delaying tactic from a government who are afraid to do what is right because they think that it might be unpopular?

Lord Sainsbury of Turville: My Lords, it is a constant source of amazement to me that noble Lords who belong to a party that singularly failed to resolve the issue when it was in government and whose policy was, essentially, "Decide, announce and defend—and then back off when the heat rises" should deplore a strategy that states that this time we will consult properly and wisely with all the parties to see whether we can reach consensus.

Lord Hoyle: My Lords, my noble friend mentioned research, but does he not agree that retaining the design teams is equally important? Like many people, I believe that at some time in the future we shall have to return to the nuclear option.

Lord Sainsbury of Turville: My Lords, it is an important question. It is not necessarily the case that a company wanting to go forward with a nuclear power station and looking for the most advanced design would choose a British design. However, we can be fairly confident that this country has the capacity to assess, build and operate such a plant.

Lord Ezra: My Lords, in view of the fact that CO levels are rising in this country and abroad, despite all efforts, is it not of urgent concern that various options that are being kept open to deal with those levels should now be closed? That applies not only to the nuclear option but to clean coal technology, a proven technology with which we should go ahead. If we carry on as we are, we may lose the battle against carbon dioxide emissions.

Lord Sainsbury of Turville: My Lords, the noble Lord is right to say that we should keep open the option of clean coal technology; we are doing so. In energy policy, it is essential to keep all the options open. It is disappointing that we saw CO emissions up by 2.2 per cent between 2002 and 2003. That was caused by an increased use of coal in the production of electricity and a fall in electricity imports from the continent. We recognise that we need to do more to meet our challenging domestic goals of getting a 20 per cent reduction of CO emissions by 2010. The current review of the climate change programme will provide an opportunity to examine the scope for further emission reductions.

Lord Trefgarne: My Lords, the noble Lord complained to my noble friend Lord Forsyth that the Conservatives did nothing about the matter when they were in office. He and his colleagues have been in office for eight years. If by some mischance they win the forthcoming election, how much longer will they need?

Lord Sainsbury of Turville: My Lords, it is a matter of public record that we have the Committee on Radioactive Waste Management. Originally, we asked the committee to report by the end of 2005, but it now looks as though it will report by the middle of 2006.

Lord Haskel: My Lords, does my noble friend agree that keeping the nuclear option open involves looking at the issue from a world-wide point of view? Does my noble friend further agree that 15 nuclear power stations are under construction and that many more are planned? Is not that a way in which the nuclear option is being kept open?

Lord Sainsbury of Turville: My Lords, it is being kept open. Work on it continues, as does the design of nuclear power stations throughout the world. We are ensuring that we in this country have the knowledge to take advantage of that development work, so that we can encourage nuclear generators to come forward.

Lord Roberts of Conwy: My Lords, is not the problem of disposal becoming urgent as the Magnox stations approach decommissioning? Am I not right in thinking that the four favoured options for disposal involve burial underground? Would it not be advisable to select all four and try them out?

Lord Sainsbury of Turville: My Lords, we need to have an agreed best solution to this problem. Once we have made that decision and gained consensus on it, we should go forward on that basis. It is not a case for trial and error.

British Summer Time

Lord Monson: asked Her Majesty's Government:
	Whether during the United Kingdom's forthcoming presidency of the European Union they will secure agreement from other European states (both within and outside the European Union) to alter the date for the start of Summer Time from the last Sunday in March each year to the third Sunday so that clocks are not put forward on Easter Sunday.

Lord Sainsbury of Turville: My Lords, as from 11 March 2002, the dates for the start and end of Summer Time were set for the last Sundays in March and October respectively. Business and individuals welcomed this change as it gives certainty to the Summer Time dates and aids the business planning process. Therefore, Her Majesty's Government have no plans to change these arrangements.

Lord Monson: My Lords, I thank the noble Lord for that rather predictable reply. Is he aware that it is not only those who celebrate Easter in church who would like the start of Summer Time to revert to the third Sunday in March, but everyone who looks forward to lighter evenings after the gloom of winter?
	Is he further aware that the 1972 Summer Time Act, which fixed the start date at the third Sunday in March, was not opposed in any way by the then Labour opposition, nor by the Liberal Party, because it was clearly highly popular with the British electorate? A subsequent European directive forced the start date to be postponed by an average of 10 days.
	Would the noble Lord agree that if in July this year the British Government, whoever it may be headed by, were to succeed in getting the directive amended, they would earn the gratitude not only of the British people but of most of those on the continent as well?

Lord Sainsbury of Turville: My Lords, this might be an issue, but we have received no complaints about it. This appears to be an EU harmonisation act which, if not universally accepted, is not significantly opposed. In those circumstances, it seems unnecessary to start a process of trying to change it.

Baroness Gardner of Parkes: My Lords, does not the present date accord not only with the European Union but with many other countries such as Australia and Africa? As most countries of the world change times on the last Sunday in March, would not things be thrown out if the European Union changed? The EU is not in the same timeframe as us—there is one hour's difference—but the problem goes wider than Britain, to the rest of the world.

Lord Sainsbury of Turville: My Lords, I am not certain about the situation in Australia, but I agree that it seems unnecessary to try to change the procedure when we have an agreement which seems eminently practical and sensible.

Lord Mackie of Benshie: My Lords, is it not the case that it would be far more logical for the Churches to operate the agreement which has been in force for a long time and fix a logical date for Easter?

Lord Sainsbury of Turville: My Lords, the Council of Nicea in 325 AD decided that issue. There have been attempts to review it, but, given the time it has lasted, there are other things it may be more profitable to try to change.

Lord Renton: My Lords, will the noble Lord bear in mind that it is most desirable for children to be at home for some time before the Easter weekend? If we have Easter at the end of March, often the school term will end on a Thursday. It would be far better to have Easter well into April.

Lord Sainsbury of Turville: My Lords, the question of where Easter falls was decided by the Council of Nicea in 325 AD. It is given statutory authority in this country by the Calendar (New Style) Act 1750. There is provision on the statute book suggesting that it should be changed, but only on the basis that the Churches agree the alternatives. That has never happened and I think it unlikely that such agreement will be reached in the near future.

Earl Attlee: My Lords, how many lives could be saved by moving to Central European Time?

Lord Sainsbury of Turville: My Lords, I am not certain whether it would have any impact. Central European Time is one hour different and applies in other parts of Europe. I cannot see why altering it would particularly affect the number of deaths on the road.

Lord Monson: My Lords, of course I agree with the Minister that it is sensible, albeit not essential, for different countries to harmonise the start and finish dates of Summer Time. But would not the Government at least consider taking soundings among the people of Europe, both inside and outside the Union, to see whether they would welcome a slightly earlier date for the start of Summer Time?

Lord Sainsbury of Turville: My Lords, as I said, there is no apparent disagreement about that matter in this country. If a very strong view was expressed on the matter by people in this country, it would be an interesting and important question whether we should try to get changes in the rest of Europe. But as everyone seems extremely content with the situation, and certainly nobody is complaining about it, it seems an unnecessary burden to take on at this point to try to get change in Europe, which is never a very easy operation.

Chinese Care Workers

Baroness Gardner of Parkes: asked Her Majesty's Government:
	How many Chinese care workers have been recruited either directly or indirectly by agencies for work in the National Health Service or social services; and what qualifications are required of them.

Lord Warner: My Lords, information on the number of Chinese care workers recruited to work in the National Health Service or social services is not centrally collected. The qualifications required for health and social care workers to work in the UK will differ by profession. Chinese health and social care workers who apply for a work permit to work in the UK must demonstrate that they have at least three years' full-time experience, using the specialist skills required.

Baroness Gardner of Parkes: My Lords, I thank the Minister for that reply. He will be aware that Members in this House have always been concerned that we would be poaching skilled staff from poor countries that have trained them and desperately need them. Does he believe that the situation is any different in China, where we hear so much about barefoot doctors?
	As I understand it, the same agencies recruit both senior care assistants and "adaptation nurses"—a phrase which I had never heard before. I am told that adaptation nurses are nurses whose qualifications would not be recognised in this country but who can come to work in acute hospitals here. I understand that the agency fee is £1,000 a nurse for that. Do we then assess how well they do when they come to work in acute hospitals? What is the basis of their future with regard to working as nurses in this country?

Lord Warner: My Lords, the Chinese Government are keen to encourage the recruitment of nurses by UK employees, and are discussing with the Department of Health what needs to be done to ensure that the custom and practice of traditional recruitment agencies in China can adapt to the requirements of UK law on nurse recruitment agencies and our code of practice for international recruitment. At present, the Nursing and Midwifery Council requires nurses to demonstrate that they have the necessary English language skills before accepting their application, and that they have undergone a period of supervised practice in the UK.

Lord Hunt of Kings Heath: My Lords, is it not the case that this country has recruited professional health workers from other countries for many years? Many of them go back to their own countries with a very high acceptance and recognition of the strength of healthcare in this country, which in turn helps exports of medical equipment and other medical facilities.

Lord Warner: My Lords, my noble friend is of course quite right. This country has adopted a code of practice for the international recruitment of healthcare professionals, for both domestic and international recruitment, and the NHS is committed to using only those recruitment agencies that comply with that code of practice.

Baroness Barker: My Lords, does the Minister agree with the Nursing and Midwifery Council that between one-half and three-quarters of overseas nurses who are required to do adaptation courses cannot find placements? Will he and people in his department discuss with the Home Office the difficulties which rules governing people coming to this country are causing, which make it nigh-on impossible for people to be booked on to adaptation placements in advance?

Lord Warner: My Lords, it is the responsibility of an employer who is recruiting a nurse from China, for example, to ensure that that nurse has undertaken the necessary language training. Those language courses are usually available under the auspices of the British Council in those particular countries. A period of supervised practice under the supervision of a registered nurse must also be undertaken, in that employer's employment. Those are the rules at the moment. From 1 September 2005, the Nursing and Midwifery Council rules around registration will change and all non-EEA nurses will have to complete successfully a 20-day overseas nursing programme, often in addition to the supervised practice programme that I have mentioned.

Lord Walton of Detchant: My Lords, to follow up the question that the noble Baroness, Lady Barker, asked about conversation or negotiation with the Home Office, is the Minister aware of the publicity given recently to certain ladies coming from eastern Europe who hold nursing qualifications that are not accepted in the UK, who have undertaken degree course studies in nursing in the UK, and who are now being told part of the way through their courses that they are not able to stay in this country?

Lord Warner: My Lords, I shall certainly look in to that particular case, but the position is absolutely clear, as I have already indicated. It is for the Nursing and Midwifery Council to ensure that people are qualified in these circumstances to undertake the duties that they have been employed to undertake, in terms of both language and supervised practice.

Baroness Morris of Bolton: My Lords, agencies now play a huge role in NHS staffing. Can the Minister say what steps are taken to ensure that those agencies adhere to the NHS code of practice on ethical recruitment?

Lord Warner: My Lords, as provided for in the Health and Social Care (Community Health and Standards) Act 2003, which was debated lengthily in this Chamber, the Healthcare Commission must register British recruitment agencies recruiting overseas workers.

Baroness Gardner of Parkes: My Lords, could the Minister explain his first Answer to me? He said that the figures were not available but, as I understand it, each one of the people we are discussing, whether they come as a care assistant or adaptation nurse, must have a work permit. Is he unable to tell me how many are Chinese because the figures are kept by another department? Are the figures unavailable to his department or are they not kept at all?

Lord Warner: My Lords, as the House has heard me say on a number of occasions, the Government are seamless in the way that we ensure that government departments work together. Work Permits (UK) estimates that 6,722 work permits have been issued to Chinese nationals—and I am sure that the noble Baroness will enjoy the precision of that figure. What I cannot say is how many of those Chinese nationals have been issued work permits for employment in the health and social care sector.

Cathedrals: Conservation

Lord Clement-Jones: asked Her Majesty's Government:
	Whether the conservation of ancient cathedrals is a priority for their heritage funding.

Lord McIntosh of Haringey: My Lords, the Government place a high value on conserving cathedrals and other historic places of worship. English Heritage supports the conservation of cathedrals through the "grants for cathedrals" scheme, which has disbursed more than £40 million since 1991. Cathedrals, along with other listed places of worship, are also able to claim back the VAT charged on eligible works. The Chancellor announced in his Budget this year an extension of that programme to 2008.

Lord Clement-Jones: My Lords, I thank the Minister for that reply, which paints a somewhat rosy picture. The fact is that the English Heritage grant for English cathedrals has fallen from £4 million to £1 million this year, directly as a result of a cut in the English Heritage budget, because the grant from the Government has fallen by £13 million. That flies in the face of a recent report from the Church Heritage Forum that shows the value of English cathedrals, which add something like £91 million to local economies. Is it not surprising in the circumstances that Simon Thurley, the chief executive of English Heritage, expressed his deep disappointment that the Government do not have conservation as one of their major priorities?

Lord McIntosh of Haringey: My Lords, I can agree with one of the many points that the noble Lord made. It is certainly true that English Heritage is spending less on cathedrals, but that is nothing to do with the government grant to English Heritage. It is because in 2001, English Heritage carried out a "cathedrals' fabric needs" survey, which showed that our cathedrals are in substantially better shape than they were in 1991, when the "grants for cathedrals" programme started. It was as a result of the fabric needs survey that it was decided to divert some of the money from cathedrals to listed parish churches and churches of other faiths. At the same time, English Heritage and the Heritage Lottery Fund are spending £17.5 million this year on listed parish churches and churches of other faiths. So the accusation that we are neglecting listed places of worship is quite false.

The Lord Bishop of Southwell: My Lords, is the Minister fully aware of the vast contribution that the country's cathedrals make to economic and social well-being, as well as to culture and tourism, through their generation of the £91 million direct spend within cathedral cities that was originally mentioned and a further £59 million in indirect spend, thus supporting 2,500 jobs? Given that repairs to cathedrals are running at £11 million a year and that, as from this year, the English Heritage grant will be only £1 million, does the Minister accept that more support is essential to ensure that cathedrals remain in good repair and fulfil their very diverse roles for our nation?

Lord McIntosh of Haringey: My Lords, I certainly agree about the value to this country of cathedrals, not only in their social and presumably religious aspects, although the right reverend Prelate did not refer to the latter, but also in their value for the economy. English Heritage's publication of December last year, Heritage Counts 2004, estimated that the value in terms of spend on goods, services and employment is something like £150 million a year, and so the value of cathedrals is not in doubt. We have to look at the amount of money spent on cathedrals in the light of the amount available for listed places of worship as a whole. In that respect, I do not think that the Government are at fault in their funding.

Lord Forsyth of Drumlean: My Lords, how is that consistent with the Government's policy of encouraging access? The Government have enabled people to go to museums and art galleries free of charge. The other day I heard of a family who did not go to Canterbury Cathedral because the admission charges are so high. Surely in that situation the Government are a little complacent in arguing that the resources available for our cathedrals are adequate.

Lord McIntosh of Haringey: My Lords, I am aware that we have an established Church in this country, but I am not aware that it enables the Government to dictate to the Church of England or any other Church whether they should charge for admission to their churches.

Baroness O'Cathain: My Lords, surely the Minister will agree that the point raised by my noble friend indicates that there is a real need for additional funding for cathedrals. For example, I am sure that most of your Lordships will remember that recently an appeal was launched for the east window of York Minster. That will cost around £23 million to put right but the total costs will be about £50 million. Is it possible for the Government to make one-off grants to places such as York for that window at York Minster?

Lord McIntosh of Haringey: My Lords, that is exactly what the Heritage Lottery Fund does. It is exactly the kind of thing to which the fund gives substantial amounts of money, and I could give numerous examples of that kind. However, taking the announcement made in January about the cathedrals grant scheme, the example of Coventry Cathedral was given. Since 1991, that cathedral has received grants of £454,000, covering almost all aspects of health and safety and repair. There are many more such examples.

Baroness Buscombe: My Lords, does the Minister accept that it is at least time to examine all the tax anomalies that hinder maintenance of our ancient cathedrals?

Lord McIntosh of Haringey: My Lords, I am not sure whether the noble Baroness, Lady Buscombe, is referring to the most significant tax anomaly, which is that of VAT. The point is that it is not possible for us to go against the sixth directive on VAT, but the Chancellor has gone around that by giving tax relief and allowing the VAT charged on eligible works to be claimed back, and that is exactly what is necessary to deal with that problem. I should add that that ability to claim back VAT has cost the taxpayer more than £25 million over the past few years, it has helped more than 5,500 buildings and, so long as no one in the Treasury can hear me saying this, it is demand led—that is, there is no budget limit on it.

Standing Orders (Private Business)

Lord Brabazon of Tara: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That the amendments in the Marshalled List, dated 24 March 2005, be made to the Standing Orders relating to private business.—(The Chairman of Committees.)

On Question, Motion agreed to.

Railways Bill

Report received.
	Clause 3 [General duties under s.4 of the 1993 Act]:

Viscount Astor: moved Amendment No. 1:
	Page 5, line 5, at end insert—
	"( ) After subsection (7B) insert—
	"(7C) The Secretary of State shall have a duty to exercise his functions under this Part and under the Railways Act 2005 that are not safety functions in the manner which he considers best calculated to—
	(a) promote the use of the railway network in Great Britain for the carriage of passengers and goods; and
	(b) secure the development of that railway network.
	(7D) In calculating how best to exercise the functions referred to in subsection (7C), the Secretary of State shall have regard to any strategy made by him under subsection (7E).
	(7E) The Secretary of State shall formulate and keep under review such strategies for the railway network in Great Britain as he considers appropriate, including strategies relating to—
	(a) the resources available for the operation and expansion of passenger and freight services in England and Wales, including investment plans;
	(b) rolling stock;
	(c) infrastructure;
	(d) passenger franchising policy; and
	(e) policies for community railways.
	(7F) A draft of the strategies made by the Secretary of State under subsection (7E) shall be laid before, and approved by a resolution of, each House of Parliament every three years.""

Viscount Astor: My Lords, this amendment follows one moved by the noble Lord, Lord Bradshaw, in Committee. The Minister will no doubt argue that the Secretary of State and his department already have a strategy. Of course, that is true. They do have one but there is a problem—they keep changing it.
	In the past eight years of this Government, there has been a stream of legislation and political intervention in a private sector industry, which has strangulated enterprise and innovation and made the task of running a public service more difficult. In that time, we have had the Transport Act 2000. The main thing that that legislation did was to create the now discredited Strategic Rail Authority, which this Bill abolishes. Incidentally, it is a body that employs 500 people and costs more than £50 million a year. Nine months later, in October 2001, the Government carried out what many saw as the political assassination of a FTSE 100 company—namely, Railtrack—and then created Network Rail. That astonishingly expensive episode is to be examined in the High Court in June. I suppose that the only crumb of comfort for the Government from that forthcoming legal battle is that it will probably take place after the general election.
	The administration of Railtrack was an immensely disruptive event for the railway industry. But the Government then gave us more legislation—this time the Railways and Transport Safety Act 2003—which was said by the Secretary of State at the time to settle the matter of the regulation of the industry for the foreseeable future.
	But, of course, that was not the end. A mere eight months after the enactment of the 2003 Act, on 19 January 2004 the Secretary of State announced yet another review of the rail industry—an industry, by then, weary of reviews, weary of structural change and weary of interventions by this Government. The rail review lasted six months. It led to a White Paper in July last year and therefore to the Bill which is before your Lordships' House today.
	Under Section 206 of the Transport Act 2000, the Secretary of State is empowered to give directions to the SRA in relation to its strategies. Indeed, every one of the three Secretaries of State since the creation of the SRA did just that. Using those powers of direction, they each required the SRA to obtain specific ministerial approval of every one of its strategies before it established them. Moreover, under Section 207 of the Transport Act 2000, the Secretary of State has the power to give the SRA directions as to how to exercise its functions. So, in abolishing the SRA, the Secretary of State does not acquire more power than he had originally before this Bill came into being.
	In effect, the Government have renationalised the network—a matter of great sensitivity, given the attention of the Office for National Statistics to the treatment of the soaring liabilities of Network Rail, now projected to reach more than £20 billion in the very near future. The Government are taking control of the funding of the railways.
	When the Transport Act 2000 was going through Parliament, Ministers told us how important it was that the SRA was under a statutory obligation to have, and to publish, a strategic plan every year, together with individual strategies for things such as rolling stock procurement, route utilisation, the West Cost Main Line route modernisation, the development of rural lines, fares policies and many others.
	Ministers even put out press releases welcoming the latest SRA strategy. They made speeches saying how essential it was that the industry and the wider public should first be consulted on the proposed strategies so that they could see what the strategies were and how they were to be implemented. If that was so important when the SRA was coming up with strategies, why is it not equally important for the Secretary of State to do the same? That is the question. Why should a government agency such as the SRA have to do things in an open, consultative and transparent way but the Secretary of State be allowed to do the same in secret, behind closed doors, when he takes over the self-same functions?
	Could it be, as is widely feared in the industry and elsewhere, that the Bill is a blueprint for closures? By publishing a strategy, the Secretary of State could prove us all wrong. If closures and cutbacks are planned—a serious concern to both the freight and passenger parts of the industry—is it not right and proper that the Government should expose their cutback proposals at least to the same degree of industry and public consultation and scrutiny as did the SRA? Let us not forget the poor, long-suffering passengers. They also have a right to know.
	Such a process is necessary also so that regional and local government can plan for the future. The private sector involved in the rail industry needs to make long-term plans as it has long-term funding commitments. Other interested parties are the PTEs and, in the future perhaps, Transport for London.
	Under the Bill, Scottish Ministers will have to prepare and publish a rail strategy, as we discussed in Committee, so why not their English counterparts? The Government are required by legislation to produce a strategy for aviation. The Minister admitted that they have strategies for buses and for walking, where legislation requires them to be produced. Of course, none of those sectors soaks up the £4 billion a year of taxpayers' money as the rail industry does. Aviation is not subsidised at all, but taxed.
	I am sure that the Minister will claim that the department must have an integrated transport policy. Over the years we have heard that claim from many governments and I can probably plead guilty to that as well. But, of course, that policy will be subject to change and will be published in the department's annual report. We say that that is not good enough. The industry needs stability and certainty of purpose. It needs to plan, to invest and to assure suppliers and others about orders and jobs. If there is to be continued private investment in the industry and if that private investment is to be available on economic and reliable terms that benefit the industry, it can be provided only by having a long-term, clear strategy.
	We all know how much passenger numbers have grown over the past 10 years and there is every indication that they will continue to grow. I am sure that the noble Lord, Lord Berkeley, will say something about the growth of freight and about the potential growth of freight for the future. However, I believe that the industry and everyone else involved must be given a proper process and proper opportunities to see and to contribute to the development of a strategic policy for the railways.
	Following the concerns expressed by the noble Lord, Lord Snape, in Committee, we have changed the amendment so that the department has to put its strategy before Parliament only every three years and not every year. Surely, the noble Lord's department can manage that. Of course, I am confident that after 5 May there will be a new Secretary of State responsible for the Department for Transport. Whoever of my honourable friends it is, I am sure that he will be able to oblige.
	I do not believe that there is a conflict between a long-term strategy and what the Minister described in Committee as a high-level output specification. They should be complementary. I do not understand how we can survive if they are not. If they are not complementary we shall all have problems, with more reviews, more muddle and, even worse, more rail Bills. For that reason alone, I hope that the Minister will accept my amendment. I beg to move.

Lord Bradshaw: My Lords, I believe that the Minister wants this Bill. The fact that Third Reading is scheduled for tomorrow might underline that somewhat starkly. If he has come to the House with a view to making some concessions, he shall have his Bill. However, if he is obdurate, we shall have to test the opinion of the House and no doubt there will be some obstacles.
	I do not intend to delay the proceedings, but I strongly underline the fact that, because the Secretary of State has taken to himself the duties that were previously enjoyed by the SRA, and before that by the British Railways Board, that does not in any way obviate the need for strategies to be made public and for there to be clear objectives for the promotion and the use of the railway network in Great Britain for the carriage of passengers and goods. That is what we want the railway to do. Everyone behind the amendment wants to see an extremely busy, efficient railway and to see it promoted for the carriage of people and freight.
	On the strategies, it is obvious that we need them. We need explicit strategies that the SRA, in its short life, has failed to deliver; for example, the rolling stock industry is in an absolute mess. We have no programme of cascades; there is no programme for the replacement of the high-speed train fleet, which is ageing. It could be rebuilt, but we need to know whether it can be rebuilt, at what cost and who will take that forward. Will the train operators take that forward or will the department do that? Someone has to do it.
	On infrastructure, I shall give one brief example: the European signalling scheme, ERTMS. For my money, we are so disconnected from Europe it does not matter much, but others seem to be pushing that strategy to the extent that it would cost the taxpayers a lot of money. Someone needs to sort out the tangle, otherwise if work is not produced for signal engineers who are short of work they will be made redundant. We need a clear way ahead for signalling in this country.
	Lastly, we need to know the policy for community railways. Will there be devolution of responsibility? If so, how much devolution will there be? We need to know about such matters.
	When the noble Lord, Lord Marsh, spoke in Grand Committee he made it very obvious that he did not believe in annual strategies. As the noble Viscount, Lord Astor, said, we have changed the amendment in light of what was said by him and the noble Lord, Lord Snape. We have provided for three years in which to produce the strategy because we realise that difficult issues are involved. But the strategy cannot be avoided and we expect that strategy to be presented to Parliament so that Parliament can have its say and so that there is an opportunity for public debate.
	I very willingly support the noble Viscount, Lord Astor, in moving the amendment, but I hope that, if we are to make quick progress, the Minister will be able to give us some comfort when he speaks.

Lord Berkeley: My Lords, I support the amendment, as can be seen from the Marshalled List. It is very important for the industry to have long-term comfort so that it knows what the Government want from the industry. I declare an interest as chairman of the Rail Freight Group.
	The 1993 Act placed a duty on the Government to promote the use of the railways for the carriage of passengers and goods. The goods part of it was fought over long and hard and I am pleased to say that freight won.
	My noble friend has said in previous debates that "promoting" is the wrong word. It is not marketing; it is not putting advertisements in the paper saying, "Isn't this a good thing". The word "promoting" in the 1993 Act—I think it is still there today—meant something different. In the 2000 Act, as the noble Viscount said, the SRA was set up to produce strategies. I believe that it has produced some good ones in its time. The freight one was welcomed.
	However, the key point is to provide the comfort that is necessary for the private sector investors who, in 10 years, have invested £1.5 billion in freight and probably rather more in passenger Roscos. They need the comfort of long-term strategies to demonstrate what the Government want from the railway system and how they see that being achieved. One or two big investors in rail freight have said that they are not investing at the moment. They do not know what is happening next because of all this uncertainty. If the amendment is passed, the Government set out their strategies anew and the Bill finally receives Royal Assent, I hope that that decision will change and that people will start investing again.
	The growth and demand are there, but a lot of money is required to make the network work. Unless people know what the Government want from the railways and from the infrastructure and the community railways, what the franchisers are going to do and what is available for freight, their boards will say, "It is too uncertain. We are not going to invest".
	If the amendment is not passed, all the wrong messages will be sent to the industry. The Government accepted a duty in 1993 to promote the railways. Then they wanted the SRA to create strategies. Twelve years later, they say, "We don't want those any more". You can see what will happen. They will not get the investment and the growth. The consequences for people's quality of life in moving around and for moving freight off the road and on to rail will be sadly and badly affected. That is why I very much support the amendment and wish it every success.

Lord Peyton of Yeovil: My Lords, I shall start with an apology for not having taken any part in Committee. My reason is that I simply cannot bear the Moses Room. If I had anything to do with managing government business, the first thing I would do is to hold a pistol to the usual channels and say, "You have got to stop taking this Bill, that Bill and the next one to the Moses Room because it stifles all debate". It might be a very convenient place, if it were properly cleaned, for the administration of anaesthetics. I hope that that is an adequate explanation for my absence at the Committee stage.
	I absolutely agree with what my noble friend eloquently said from the Front Bench when he protested against the Government's record. He said that there was a need for a long-term strategy. I agree. He anticipated, in a moment of hope, that there would be a new Secretary of State after the general election. That may or may not happen.
	I find the amendment difficult because it seems to encourage the Secretary of State to go on fiddling and intervening with the railways, about which any Secretary of State knows awfully little. Perhaps I may bore the Chamber for a moment with a fragment from my own past. Many years ago, when I was Minister for Transport and the noble Lord, Lord Marsh—who is unhappily not very well today—was the chairman of the railways, I recall saying to him, "I know that you have an impossible job. I am even more certain that mine is impossible. I promise to support you and not to interfere irresponsibly and unnecessarily with you. I shall support you both publicly and privately until I tell you to the contrary". That seemed to me to be a sensible relationship which more or less worked.
	I have difficulties with the amendment when I see the encouragement that is given to the Secretary of State. Most Secretaries of State have not been able to spell the word "strategy" as concerns the railways. Is it wise to encourage a Secretary of State who would probably number among his many qualities an innocence of knowledge of the railways to frame a strategy or go into the detail? The amendment states:
	"The Secretary of State shall formulate and keep under review such strategies for the railway network in Great Britain as he considers appropriate, including strategies relating to . . . the resources available for the operation".
	I think that the Treasury should be involved in that.

Viscount Astor: My Lords, perhaps I may just point out to my noble friend how much I agree with the principle of what he is saying. Of course it is not our idea that the Secretary of State should be responsible for running the railways; it is the Government's. We are saying that if the Secretary of State is taking responsibility for running the railways, he should have a strategy. Is that not a fair position?

Lord Peyton of Yeovil: My Lords, I think I accept what my noble friend is getting at. But what I am saying is that I do not take the optimistic view that Secretaries of State are particularly knowledgeable about railways or anything else. A great many Secretaries of State are innocent and have very little experience of running anything.
	I accept that the Bill gives the Minister far greater powers than it should. However, I do not want it to provide what I would take as an encouragement to the Secretary of State to fiddle about with railway rolling stock, railway infrastructure, passenger franchising policy and policy for community railways. Somebody at the end of the line will have the terrible job of running the railways. That is my real point. I have every sympathy with that person as opposed to a Secretary of State who is always fiddling with things about which he does not know. I give way to the noble Lord.

Lord Berkeley: My Lords, I am grateful to the noble Lord. Going back to when he was the Secretary of State and the noble Lord, Lord Marsh, was the chairman of British Rail, surely he accepts that now, effectively, the Secretary of State combines the role of Secretary of State with that of chairman of British Rail. That is his role. The combined forces of the chairman of British Rail and the Secretary of State would need to produce strategies.

Lord Peyton of Yeovil: My Lords, I shall not go into that at length. My simple point is that although I accept that the Bill does thoroughly wrong things, it is nevertheless wrong to underline them by telling the Secretary of State what to do. It will only encourage him to give instructions to other people. I think that that would be fatally stupid.
	I should find it very difficult to support my noble friend, although I understand his motives in producing the amendment.

Lord Davies of Oldham: My Lords, I am grateful for this short and informed debate, which builds on the excellent debate we had in Committee. I am not in such a benevolent mood that I can accept the amendment. However, I hope that I am able to express how the Government envisage the development of strategy in such a form as to reassure noble Lords opposite who have pursued these issues with some force and real consideration both in Committee and again today. One matter on which I can assure the noble Viscount, Lord Astor, is that I shall be a lot closer to him than was his own Back-Bencher, the noble Lord, Lord Peyton, on the issue of strategy and the role that a Secretary of State might play.
	I also note that the noble Viscount indicated that there will be a new Secretary of State after the election. He is obviously closer to the Prime Minister than I am because that knowledge has not yet been vouchsafed to me. But we shall see in the fullness of time; and the fullness of time is, after all, only a matter of weeks—perhaps. We may therefore not have to detain ourselves too long. Everything that I say about the general election today is purely conditional, as noble Lords across the House will recognise.
	I am not able to accept the amendment, not because I do not appreciate the importance of the argument about a strategy for the railways, but for the following reasons. The first part of the amendment imposes a duty on the Secretary of State to promote the use of the network and to secure its development. That is unnecessary. It is stated in the amendment but is already in the Bill.
	Section 4 of the 1993 Act, as amended by Clause 3, clearly envisages that to be the duty of the Secretary of State. The duty applies in relation to functions transferred or assigned to him by Sections 6 to 22 of the 1993 Act and by Part 4 of the Bill, other than relating to bus substitution in Clause 39. That includes his role in network modifications, licences, access agreements, and access charges reviews. It is important to note that that duty sits alongside a number of others specified in Section 4 of the 1993 Act.
	One of those duties is to contribute to the development of an integrated system of transport. I noticed that the noble Viscount, Lord Astor, blushed marginally when referring to integrated transport—a fleeting but well merited blush, given the record that we can all recall over almost two decades of his party being in power and responsible for transport. That duty applies to the Secretary of State. We must remember that the Secretary of State is responsible for all modes of transport. It is his job to ensure that people have a choice of modes, that the various modes operate efficiently together and that growing transport demand is met sustainably. The duty that we have provided in the Bill squares with that.
	I put it to the House that the duty in the amendment adds nothing material to what is in the Bill already. By creating a duty independent of the other Section 4 duties, the amendment fails to allow for the fact that the Secretary of State's role goes much wider than rail. Of course he has strategic obligations. How could he effectively fulfil his transport obligations without having a strategy?
	The noble Viscount, Lord Astor, said that the Government have a walking strategy. He said that not in disparaging terms but as an aside. He emphasised that the Government have an aviation strategy. Indeed we have; that is overdue in this country, as most noble Lords will recognise. Is that in an aviation Bill? Of course not. The aviation strategy was produced in a White Paper. It is a strategy for many years ahead, as it is bound to be when it concerns the development of airports, which require huge investment and have enormous significance for users of their facilities and those who live nearby. That obligation is not contained in legislation. The Secretary of State cannot do his job of providing for the requirements of the air-travelling public unless he develops a strategy.
	I turn to the duty to formulate strategies. I recognise that this is not in itself a killer argument, but the provision is unnecessary. The key role responsible for transport policy must be strategic. The Secretary of State devises, publishes, explains and promotes what he wants delivered. By its nature, that is a strategic role. Why did the Strategic Rail Authority have a duty to develop a strategy? Because it was not the Secretary of State and because unless its duties were enshrined in statute, it could not have followed a strategic role.
	In abolishing the Strategic Rail Authority and developing the Secretary of State's role, we do not need to pick up those powers of the Strategic Rail Authority and apply them in legislation to the Secretary of State, because the Secretary of State is under an obligation to produce a strategy. It would be inconceivable to those in either this House or the other place that he could pursue the objective of meeting the demands of the travelling public unless he had due regard to such points.
	To underline that point, last year's White Paper on the future of rail stated explicitly that the Secretary of State intended to take direct charge of rail strategy. Indeed, the chapter entitled, "The role of government", includes a section headed, "Setting the strategy". There is no need for that duty on the Secretary of State.
	In presenting those arguments, I cannot, of course do anything about the dissenting voice of the noble Lord, Lord Peyton. We regret that we met in such inhospitable circumstances in the Moses Room and that we did not have the benefit of his contribution on the Bill. I cannot reach him on the question of strategy because, as a former Secretary of State for Transport, he disavows the whole notion that any Secretary of State could conceivably have a strategy. I understand that from the experience of almost two decades of the previous administration. We live in changed times when the majority of the public, and certainly the noble Lord, Lord Bradshaw, speaking on behalf of his party, has a rather different view of the virtues of strategy.
	The second problem with the amendment is that it appears to set out a series of topics on which the Secretary of State would be obliged to formulate strategies. That problem with the concept of separate strategies for separate aspects of the railway is that it risks a fragmented approach. Yet the burden of remarks from all sides of the House when we discussed strategy was the necessity for a joined-up, holistic approach that has regard to all aspects of infrastructure and operation. There is an important distinction between having a strategy for the railway and having a series of strategies for parts of the railway, which is what is envisaged by the amendment.
	That links into my third and most important point, which is that the amendment fails to reflect the future approach to rail strategy provided by the Bill. The Bill provides for the Secretary of State to give clear strategic direction at the most appropriate time in the run-up to an access charges review. As noble Lords will be aware, Schedule 4 sets out a procedure in which the Secretary of State will notify the Office of Rail Regulation of what he wants the industry to achieve and the funding that he is able to make available during the review period to secure the outcomes that he wants. There may need to be some iteration to match the statement of what is deliverable with what the ORR thinks can be delivered with the money available, but that is provided for.
	The notice from the Secretary of State to the Office of Rail Regulation will be known as a high-level output specification and it will be the key statement on his strategy for the railway during the forthcoming period. A comprehensive statement is bound to cover most, if not all, of the topics set out in the amendment, but in a coherent and connected manner. It is vital that we do not set the Secretary of State tasks that risk cutting across the strategic approach to specify outputs. The first statement of that kind is likely to be produced at the end of 2006.
	When we debated that matter in Committee, I accepted, as I do today, that the high-level output specification might not be quite enough on its own. It will meet the requirements of the Office of Rail Regulation, because it will consider the whole period to be covered by the access charges review, which will normally be five years. The argument was put with great eloquence in Committee that that will be a relatively short period for some aspects of planning for the industry. The Government recognise that there is a strong case for setting the specification in a longer-term context.
	There is also a case for a document that explains and interprets the formal specification in a way that can be readily understood by a wider audience. That could be of value to local authorities and others—my noble friend Lord Berkeley again emphasised the role of freight and its interest in the issue—who need to think ahead about transport provision.
	Given those considerations, I gave an undertaking in Committee that I am happy to re-emphasise today. When the high-level output statement is set out, the Government will also explain to everyone—those in the industry, in Parliament and the wider public—the implications of the specification and what is the Government's long-term strategy for the rail industry into which the specification process fits. Such an explanation will be of use and interest to many parties. The Government's key requirement is that it should be closely and clearly related to the high-level output specification and should not run any risk of cutting across that document.
	Producing the output specification and the further material that I have just promised is, I contend, the right way for a government to set out their strategy. The output specification is a linchpin of our reforms because it will bring together specification and cost control more effectively than ever before. Although we understand the thinking behind the amendment and have great sympathy with much of that thinking, the fundamental reason why we cannot agree to it is that it does not make the link to the specification that we regard as crucial.
	I repeat my promise that there will be a strategy for the railway in the same way that we have a strategy for aviation, which itself did not require an obligation upon the Minister in legislation. I can promise that it will look beyond the horizons of the access charges review. I believe I can promise that it will deliver what noble Lords in all parts of the House seek to achieve through the amendment.
	I cannot agree to the amendment, despite the pleas of the noble Lord, Lord Bradshaw. The noble Viscount, Lord Astor, has also presented the issues with some persuasion. The noble Lord, Lord Bradshaw, indicated that he would be disappointed if I could not agree to the entire amendment. I accept the thinking behind the amendment; I know how persuasively he has argued that in Committee and today, and I recognise the strength of his views. I cannot agree to the amendment, but I can deliver the substance of what noble Lords on both Front Benches seek. I hope that, with that assurance, the noble Viscount, Lord Astor, will be able to withdraw his amendment.

Lord Peyton of Yeovil: My Lords, before the noble Lord sits down, the confidence that the Bill has imposed in the Secretary of State, and which the Minister has repeated today, has convinced me by a pretty narrow margin that I had better support my noble friend's amendment after all, despite the fact that it gives unnecessary encouragement to a Secretary of State to tamper in matters of which he knows very little.

Lord Davies of Oldham: My Lords, I hear what the noble Lord has said, but he indicated in fairly principled terms why the amendment was not acceptable to him. I am sorry that my perspective on the amendment differs from his. I had hoped that, had there been any further action on the amendment today, he might have joined us in the Division Lobbies. But as I am confident that the noble Viscount, Lord Astor, will withdraw his amendment, that issue may not arise.

Viscount Astor: My Lords, I must offer the Minister my commiserations. It must be sad for him to realise that he had perhaps persuaded one Member of your Lordships' House to support his argument but then suddenly to find that his argument has had the opposite effect. Never mind.
	I shall deal with the Minister's two technical objections. His last point was that the amendment had no link to the high-level specification. That is not a valid excuse because it can be put in as part of the strategy. You cannot say at one point that the inclusion of "rolling-stock" or "infrastructure" in proposed new subsection (7E) is too prescriptive but then object in the next minute that the high-level specification has not been included.
	The Minister is right that proposed new subsection (7E) includes a list of various things. The amendment refers to such strategies as the Secretary of State,
	"considers appropriate, including strategies relating to—".
	That does not imply a fragmented strategy; it just says that, as part of a strategy, there must be some reference to those aspects. The Minister then said, rather tellingly, that most, if not all, will be addressed. That is a classic get-out clause, is it not? We run the risk that policy for community railways, for example, could easily not be addressed. Those are the two technical arguments.
	I shall now deal with the principle. I am grateful for the support of the noble Lord, Lord Bradshaw, who tabled this amendment originally in Committee, for which I must give him due credit, and the noble Lord, Lord Berkeley. The Minister failed to address the Scottish comparison—Scottish Ministers will have to publish a strategy. It is not surprising that he did not deal with that because it does not help his argument.
	The Minister brought up the aviation point. It is quite simple: the aviation industry is taxed, not subsidised, by £4 billion a year.

Lord Davies of Oldham: My Lords, the Scottish position is not quite as the noble Viscount says. The Bill does not lay a duty upon Scottish Ministers; it creates a power that they may exercise, whereas the amendment is drafted in terms of a duty.

Viscount Astor: My Lords, I accept what the Minister says, but the Scottish Parliament and Scottish Ministers have indicated that they will take up that power as a duty.
	The other point related to the Secretary of State and his responsibilities. Let us be clear: if my noble friend Lord Peyton produced an amendment that said that no Secretary of State would be encouraged "to fiddle about", to use his words, I am sure that we would all support that fiddling amendment. We are all against Secretaries of State doing that on their own policies or on anything else.
	The Bill has brought Network Rail directly under the control of the Secretary of State. He is responsible for funding; he is taking control. If he takes control and accepts that responsibility, he must come before Parliament and there must be a duty. That duty ought to be in the Bill because the industry needs to know. It is no good saying that it will just be done by the specification report and what the department publishes annually; the industry needs to know the long-term plans. It is a long-term industry whose funding requirements are long term.
	The final point that persuaded me to test the opinion of the House was the Minister's remark that the amendment was unnecessary, because we all know that when Ministers say that, the amendment is indeed very necessary.

On Question, Whether the said amendment (No. 1) shall be agreed to?
	Their Lordships divided: Contents, 120; Not-Contents, 136.

Resolved in the negative, and amendment disagreed to accordingly.
	Schedule 4 [Reviews by ORR of access charges and licence conditions]:

Lord Bradshaw: moved Amendment No. 2:
	Page 92, line 18, at end insert—
	"( ) the interests of the users and providers of services for the carriage of goods by rail;"

Lord Bradshaw: My Lords, I shall not keep the House long on this amendment. New paragraph 1D(4) on page 92 gives a list of objectives and standards which "may include, in particular," information,
	"with respect to . . . the following".
	On reading the list, Members will find that it mentions "capacity"; "frequency of railway passenger services"; "journey times"; "reliability of railway services"; "overcrowding"; "fares"; "information"; "accessibility"; "major projects"; and,
	"protection of persons from dangers arising from the operation of railways".
	It does not mention,
	"the interests of the users and providers of services for the carriage of goods by rail",
	which we believe is a major omission. I can assure the Minister that huge numbers of people are extremely concerned about the growing problem of congestion on our roads and are extremely disappointed that the Government do not seem to have a coherent strategy for dealing with that problem. I believe that it is necessary to insert the words as printed on the Marshalled List in the Bill. I beg to move.

Lord Berkeley: My Lords, I also support the amendment and the remarks made by the noble Lord, Lord Bradshaw. Following on from my noble friend's comments in response to the previous amendment, this covers in effect the content of what might be called the high-level output statement which will form part of the strategy. Like the noble Lord, Lord Bradshaw, by the time we reach heading (j) we are into a fair amount of detail, although what is left out is the interest of a major user of the railway system; that is, rail freight operators. They are in the private sector and therefore have the most to lose when things go wrong.
	The list of objectives and standards set out in paragraph (4) is extraordinarily detailed and interesting. While it is not limiting, it is detailed enough to cover the "types and numbers of trains" and the "frequency of . . . services", which will probably include freight but may not cover journey times. On the provision in heading (g) covering the "quality of information", does that ask whether the indicator board on platform 2 at Goring-on-Thames is working? In the past Ministers and noble Lords have asked why we have to specify this level of detail. However, if we are doing that, I argue that freight needs to be mentioned in such a long list covering detailed points on passenger services. For that reason, I support the amendment.

Viscount Astor: My Lords, I rise briefly to say that I, too, support the amendment.

Lord Davies of Oldham: My Lords, I commend the noble Lord, Lord Bradshaw, on his eloquence in moving the amendment and the noble Viscount, Lord Astor, on the brevity and force of his support. I want to repeat what I said in Committee that of course the Government recognise the importance of the rail freight industry in this country and I agree with the noble Lord, Lord Bradshaw, that there is increasing interest in freight against the background of considering how to tackle our congested road network and reduce the amount of goods being delivered by road transport. That point is well taken. I want to reassure noble Lords that the Government take very seriously rail freight issues and they intend to involve the industry fully in the development of the high level output specification which, as my noble friend Lord Berkeley pointed out, forms the basis of the allocation of resources.
	In the interests of clarity, the high level output specification is the notice from the Secretary of State to the Office of Rail Regulation as part of the access charges review process, and it will be the key statement of his strategy for the railway for the coming period. It will include information from the Secretary of State and Scottish Ministers, as appropriate, about desired outputs and finances for the rail industry over the review period.
	New paragraph 1D(4) of Schedule 4 lists standards and objectives with respect to particular matters that may be included in the specification. As my noble friend Lord Berkeley indicated, the list is permissive in nature, but it is not exclusive. It includes such things as objectives and standards with respect to the capacity of networks, journey times and the reliability of trains on the network. But the list does not limit what the Secretary of State can do. He could include within the specification standards and objectives in respect of the interests of the users and providers of services for the carriage of goods by rail in the information that he provides to the Office of Rail Regulation.
	We are well aware that the high level output specification for passengers is bound to affect freight operators. After all, freight operators use the same tracks on the same networks as passenger operators. Therefore the Government will need to ensure that they are aware of the potential effects on freight of any decisions that are taken in setting the specification. We have already begun what we consider to be constructive discussions with the freight industry on this very important point.
	Furthermore, under Section 4 of the Railways Act 1993, as it would be amended by this Bill, the Secretary of State would already be under a duty when carrying out his functions as part of the access charges review process to carry them out in a manner he considers best calculated to protect the interests of persons providing services for the carriage of passengers or goods by the railway in their use of any railway facilities which are vested in a private sector operator.

Lord Berkeley: My Lords, I am grateful to my noble friend for allowing me to intervene. On a point of clarification, he mentioned the high level output statements for passenger services. I was pretty sure that it was established in Committee that the statements would apply to both passenger and freight services. Could he possibly clarify that?

Lord Davies of Oldham: My Lords, a great deal of the detail in the list referred to by noble Lords involves passenger transport services. The noble Lord, Lord Bradshaw, stressed that point. However, I want to emphasise, as I did in Committee, that the high level output specification could include freight because, over the period that the specification is due to run, it would not be possible to construct one in relation to passenger services which did not take into account the needs of freight. So the duty will apply in respect of the prices charged for such use and the quality of the service provided.
	I think that this will provide the protection argued for very forcefully both today and in Committee by noble Lords. Indeed, given his declared interest in the rail freight industry, I want to reassure my noble friend Lord Berkeley that we consider this to form the basis of a reassurance to the industry that their interests with regard to the development of the specification and thus the development of the railway itself will be taken fully into account.
	The amendment would not give any new powers or any new obligations to the Secretary of State and the interests of freight operators will already be protected by the Bill. So, while I recognise the strength of the arguments put forward, it is clear that we do not foresee the future development of the railway without acknowledging the very important part that freight services have to play—particularly given the remark made by the noble Lord, Lord Bradshaw, that road congestion issues also need to be tackled by ensuring rail freight provision.

Lord Bradshaw: My Lords, I thank the Minister for his encouraging reply. When we read Hansard we shall see that we have been given the assurances we seek. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Bradshaw: moved Amendment No. 3:
	Page 95, line 5, leave out "determine" and insert "advise the Secretary of State or the Scottish Ministers"

Lord Bradshaw: My Lords, this is a more significant amendment and addresses an issue where we may be at odds with the Government. Amendments Nos. 3 and 4 reflect our concern that the decision about closures should be based on advice given by the Office of Rail Regulation, but that it should be the responsibility of the Secretary of State to make the decision. We are not in favour of a decision of that nature being sloughed off, if I may use that expression, to an official or a functionary; it must be a political decision.
	I am an optimist who believes that the railways probably are on the road to financial recovery, but I am sure that it would generate a great deal of heat if such a decision were to lead to service closures. It would be incredibly difficult for a Secretary of State to get round the fact that he is the person who should make an essentially political decision about the withdrawal of services, albeit on the advice of an official—in this case the Office of Rail Regulation—who, as I understand it, would certify that the correct procedure had been followed and that the figures had been properly devised. We are not content that such a decision should not be part of the political process. I beg to move.

Lord Berkeley: My Lords, I support the amendment. Perhaps I may build a little on what the noble Lord, Lord Bradshaw, said. This is the kind of situation envisaged at page 95, line 12, when there is a serious disagreement between the Secretary of State and the Office of Rail Regulation over how much money is necessary to maintain the railway to the standard required by the Secretary of State but which he is not prepared to fund, for whatever reason.
	It has always seemed wrong to me that—as the Bill provides—the decision to close, for example, the West Coast Main Line or the East Coast Main Line, or to impose a 30 mile per hour speed limit because the track is in such bad condition, should rest with the regulator. The regulator could probably come up with many other options. However, that is the kind of decision that would have to be made to save a lot of money.
	I think that that should be a political decision for the Secretary of State. It is not for the regulator to say, "Let us put a 50 mile an hour speed limit on the West Coast Main Line but leave the East Coast Main Line as it is". Such a decision would affect so many of the electorate of this country in one way or another that it should be taken by a Minister. I know that such decisions will be taken only in extremis, but that is what this whole section of the Bill is rightly about. It would be much more appropriate for Ministers to take these decisions rather than leaving them to a regulator.

Lord Davies of Oldham: My Lords, I am grateful to both noble Lords who have contributed to the short debate on this amendment. I am sure they will agree that it envisages an extreme situation which would arise only after two requests for provision of a revised specification of outputs.
	The chairman of the Office of Rail Regulation has made it clear to the Secretary of State that in the event that the office finds it necessary to request a revised specification it will do so publicly and transparently. Similarly, the Secretary of State confirmed this commitment to transparency in the access charges review process in his letter to the chairman of 28 February in respect of access charges reviews and freight.
	If in the extreme situation that the Office of Rail Regulation is not provided at the third attempt with a specification which is reconcilable with the available resources, it would be appropriate for the industry's independent economic regulator to arrive at a final determination of what can be delivered for the purposes of its access charges review.
	In my letter to Members of the Grand Committee following its first sitting, I set out my view that where the Office of Rail Regulation had to reach such a determination, the Secretary of State could not avoid accountability for the consequences. It is not conceivable that we could arrive at a situation of such extreme difficulty and irreconcilability—which both noble Lords have indicated is their concern—without the Secretary of State being accountable and challenged on how such circumstances had arisen.
	The operators have repeatedly stressed throughout the rail review and the passage of the Bill the importance of the safeguards arising from independent economic regulation. Independent determination is absolutely necessary in the extreme situations envisaged by these provisions. The Office of Rail Regulation will arrive at its determination publicly and transparently and, in doing so, will be bound by its duties under Section 4 of the Railways Act 1993. These include the duties to enable providers of railways services to plan their businesses with a reasonable degree of assurance and to protect the interests of users of railway services in respect of the price and quality of facilities.
	The amendment moved by the noble Lord, Lord Bradshaw, and supported by my noble friend Lord Berkeley would have the—I am sure unintended—consequence of undermining the protections for operators which are guaranteed by the independent economic regulation of the railway industry that is so prized by the operators. The independence of the assessment meets the cardinal point of the thinking behind the Bill. I hope that the noble Lord will recognise that, even in such an extreme circumstance—in fact, particularly in such an extreme circumstance—an independent judgment should be made.

Lord Bradshaw: My Lords, I thank the Minister for that reply. I shall read it carefully. I fully accept that the regulator will make his judgments independently, and I am quite satisfied about the integrity of the holder of that office. However, should he come to the conclusion that, because of a lack of funds—an issue to which the noble Lord, Lord Berkeley, referred—it is not possible to maintain a railway service of a reasonable standard or at all, the decision about what should be done should be made by the Minister as a result of the facts laid before him, not by an official before the facts have been laid before the Minister.
	I shall study what the noble Lord, Lord Davies of Oldham, has said and return to the issue if the Bill receives a Third Reading. In the light of what he said, and to the extent that it appears acceptable, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Astor: moved Amendment No. 3A:
	Page 95, line 9, at end insert—
	"(2A) The Office of Rail Regulation shall not be entitled to make a determination under paragraph 1G(2) which is likely to lead to the services provided with the use or in respect of any railway facility being curtailed or discontinued (whether as to quality, time or in any other respect) unless the requirements of paragraph 1(G)(2B) have been complied with and the conditions in paragraph 1G(2C) have been satisfied.
	(2B) The requirements are that the Office of Rail Regulation has consulted—
	(a) the facility owner and the beneficiaries of all access contracts in respect of the railway facility in question; and
	(b) the franchisee under every franchise agreement which contemplates the franchisee, or any person on its behalf, using the railway facility in question,
	and has taken into consideration all representations and objections made to it by those persons in respect of the proposed determination.
	(2C) The Office of Rail Regulation may not make a determination under paragraph 1G(2) unless it is satisfied that—
	(a) the value of the rights of such facility owner and the beneficiaries under or in respect of that railway facility or those access contracts shall not be adversely affected by the proposed determination, or that adequate financial compensation shall be payable to them out of public financial resources in respect of any such adverse effect; and
	(b) in the case of a franchise agreement, the agreement shall be amended so as to relieve the franchisee from the obligation to comply with its terms to the extent that, if the agreement were not amended, compliance would be impossible or more onerous by reason of the proposed determination.
	(2D) If the Office of Rail Regulation fails to make a determination under paragraph 1G(2) by reason of one or both of the considerations specified in paragraph 1G(2C), the Secretary of State shall ensure that public financial resources shall be increased accordingly."

Viscount Astor: My Lords, Amendment No. 3A is grouped with Amendments Nos. 5 and 6. At this stage, I shall not speak to Amendments Nos. 5 and 6 and I shall not move Amendment No. 5. However, if they so wish, the noble Lords, Lord Bradshaw and Lord Berkeley, can move that amendment when we come to it.
	I thought long and hard about whether to cover this important issue with a number of small amendments or one large one. I eventually decided that it would be easier to bring forward one large amendment. I am afraid that I shall not be brief in summarising it because of the complexity of the issue, and I apologise in advance for that.
	This is a serious issue which concerns the outcome of access charges reviews by the Office of Rail Regulation. Perhaps I may give your Lordships a little of the background. On 9 February 2004, the Secretary of State assured Parliament, the industry, the public and the investment community about a number of matters in the rail review. I am sorry to say that the Bill breaks those assurances.
	The noble Lord, Lord Davies, has been most helpful during the passage of the Bill and in correspondence. However, I regret to inform your Lordships that in the Minister's defence of the provisions of the Bill, in the statements that he has made to the House, and indeed in the letters that he has kindly provided to your Lordships, he has not satisfied noble Lords on this side of the House on this issue.
	I remind your Lordships of what the Secretary of State said in a Written Answer to a Parliamentary Question on 9 February 2004:
	"The Government also rules out any change to the rights of third parties, which will be protected. There is no question of weakening the effectiveness of economic regulation . . . There will be no diminution in the regulatory protection of the private sector investors in the railway ... The review announced on 19 January will consider how the Government can control the total public expenditure on the railways, while respecting the principles set out above".—[Official Report, Commons, 9/2/04; cols. 1237-1238W.]
	I contend that the Bill does not, unfortunately, respect those principles.
	Under Schedule 4, the Secretary of State is to give notice to the Office of Rail Regulation of what he wants the industry to achieve and the funding that he will make available over a review period. It is, therefore, the Secretary of State who sets the outputs; we are told that it will be called the high level output statement. The Bill says that the information will cover the types and numbers of trains, the frequency of passenger services, journey times, reliability, overcrowding, the levels and types of fares, the quality of information provided to passengers, major projects and so on.
	That is fine as far as the franchising outputs are concerned, but with regard to the work that Network Rail is to do—the network outputs—it is a change to the current situation. Until now, the ORR, not the Secretary of State, has set the network outputs, having been informed of the franchising and other strategies of the Strategic Rail Authority. The Bill changes that. It is a change to the rights and protections of third parties to have network outputs set by the ORR and not the Government. That is a diminution of their protection, something that the Secretary of State promised would not happen. I will try and explain why.
	Freight and passenger operators are clear that, by taking from the ORR the role of setting network outputs, the Government are increasing the risks for those operators. They lose the stabilising role of the independent regulator, intervening to ensure that network outputs are protected and that the decisions are taken on a proper basis. What are the risks? Quite simply, the Government—that is, the Treasury, with its perpetual hostility to the railway industry—could, through this new power, require the industry to cut back on maintenance and renewal, so putting the network into a slow decline to save money for short-term reasons.
	Under the Bill, the Secretary of State does not have the public interest duties of the ORR to promote efficiency and economy and the development and use of the railway system. The ORR does not work according to short-term or political criteria. In setting network outputs under the Bill, the Secretary of State does not have to take into account the medium- and long-term view of the interests and the health of the industry. The Secretary of State is, in effect, entirely in the hands of the Treasury.
	The Treasury will probably do what it consistently did throughout the 50 years of the industry's nationalisation—slowly and inexorably starve it of funds. That is what the Bill allows. It puts in place a very effective mechanism by which the Government will remove the protection that the independent regulator provides against politically inspired cash starvation of the industry.
	I have put down the amendment to rein back the worst excesses of Schedule 4 and restore the protections that the private sector investors in the railway industry need, while, importantly, maintaining the right of the Government to make public expenditure decisions that are consistent with the rights of private operators.
	In many respects, my amendment would give substance to the assurances given in correspondence during the passage of the Bill through Committee. But assurances are one thing and legislation another. If there is to be a protection, the best place for it is in the Bill.
	My proposed paragraph 1G(3) of Schedule 4 deals with the situation in which the Office of Rail Regulation faces a cash squeeze between the high level output specification that the Minister has said he wants under paragraph 1D and the public financial resources the Treasury has told him he has to use to buy those outputs. The two do not match, and one of them has to give way.
	As Schedule 4 stands, it is always the outputs which have to give way. It can never be that the public financial resources have to be increased. Of course, the Minister will say that the Secretary of State can get more money from the Treasury. That is undoubtedly true, but what happens if he does not and the ORR has to decide where the cuts will fall? They could fall anywhere. What protections are there then for the freight and passenger operators? The answer is that there are none in the Bill.
	We are told that the ORR would have to make sure that as far as possible, existing contractual rights would be honoured. That is not enough: the railway network code, which is part of those access contracts, contains provisions that allow the network outputs—the capacity or condition of the network—to be reduced without the contracts being broken. The contracts may well be intact but the freight and passenger operators would still face those reductions. So, the operators need better protection.
	Under the franchise agreements, the franchisees have to deliver certain specified levels of services to their passengers. In doing so, they are dependent on the capacity and condition of the network, which enables them to produce their service. What happens if the network is deteriorating because the Government have embarked on a policy of cutbacks and if speed restrictions, for example, are higher than they would otherwise be or capacity has been reduced because the network's condition is getting worse? In such a situation, the franchisee is squeezed. Nothing in his franchise agreement allows him to turn to the department, as the successor to the Strategic Rail Authority, and say, "You can't penalise me for poor performance, which is in my contract, if the network is declining because the Treasury has decreed that it should. I need relief in this case, otherwise I am in the impossible situation of being committed to deliver high standards under my existing franchise agreement but being unable to do so because you are cutting back on Network Rail's funding". For those reasons, my amendment would provide freight and passenger operators with the necessary protections.
	Paragraph (3) of the amendment says that the ORR cannot make a decision under paragraph 1G(2) to cut back on the network outputs unless it satisfies the requirements of paragraphs (4) and (5). Paragraph (4) provides that, before the Office of Rail Regulation can decide on network cutbacks under paragraph 1G(2), it must consult the affected operators. That must be right. They are decisions of considerable importance to the operators who use the network.
	Paragraph (5) says that having done that, the ORR may not make a cutback determination under paragraph 1G(2) unless two conditions have been met. The first concerns access contracts. The value of the rights of the operators must be maintained, or they have to receive adequate financial compensation out of public funds. So the Government can still cut the railway, but they must compensate operators if they sustain a loss as a result. That loss would be measured by the value of their existing contracts.
	The second condition in paragraph (5) concerns franchisees. If there are to be network cutbacks, the franchisees must have amendments to their franchise agreements that relieve them of the obligation to meet impossible or more onerous targets or standards of performance as a result of the ORR's Treasury-inspired network cutbacks decision.
	These protections should be uncontroversial. They require the Government to honour the assurances that the Secretary of State gave at the beginning of the rail review in 2004. They do what we are told in correspondence from the Minister ought to happen anyway, but they provide the protection in legislation.
	The final paragraph of my amendment, paragraph (6), is important, providing the protection that the operators need. It follows from the previous two. It provides that if the ORR has been prevented from making a network cutback determination under paragraph 1G(2) because one of the conditions in proposed paragraph (5) has not been met—either access contract rights are being unjustifiably diminished in value or franchisees are not getting the relief they need—then, if the outputs cannot be turned down, the amount of public money to pay for them must be turned up. They have to be paid for, and in these limited but significant circumstances the Treasury will have to swallow the fact that the Government cannot ride roughshod over people's legitimate and valuable rights without having to pay for that. That fact must follow if the Government are to honour the assurances that they gave last year and if private sector operators in the railway industry are not to be exposed to unjustifiable interference in their rights.
	My amendment would give the Government the flexibility that they say they need in controlling public expenditure—an important point—but also balances that need in cases where private rights are threatened or may be trampled on. I beg to move.

Lord Bradshaw: My Lords, I rise to lend support to what the noble Viscount, Lord Astor, has just said and to his amendment. This is an extremely complicated issue and I imagine that even the Minister may need time to study what is said. However, as far as I can tell, it also covers the content of Amendments Nos. 5 and 6. Obviously, in such a complex situation it has been necessary for those people who are here to scrutinise legislation to consult widely with people who are well advised. That is not something which we find easy to do. We do not have the official advice that the Minister has at his disposal.
	I am interested to hear what the Minister has to say, but as far as I can tell at the moment, this amendment which has been moved by the noble Viscount, Lord Astor, touches on the salient factor that, although the network code protects people, there are certain areas it probably does not reach. We must always bear in mind what happened to Railtrack, for example. I am not saying that Network Rail will go the same way, but changes can occur and the network code could disappear. The operators, especially the open access operators, who are very badly protected without the code, could find themselves disadvantaged substantially. They have extremely expensive long-term sunk assets, which cannot easily be moved somewhere else.
	I can envisage circumstances where these people might have a very good case for compensation. I believe that the terms that have been set out by the noble Viscount sketch out a way forward. I am not saying that it is the best way forward, but I am interested to hear what the Minister has to say when he responds.

Lord Berkeley: My Lords, this amendment has been put down by the noble Viscount quite late in the day, but it is a neat way of achieving the intent behind Amendments Nos. 5 and 6, which, as the noble Viscount and the noble Lord, Lord Bradshaw, said, are designed to provide compensation to those organisations or companies that are affected by subsequent changes to the capability of the network.
	The important thing in both this amendment and in Amendments Nos. 5 and 6 is to encourage all the parties to the discussions to come up with ways of mitigating the problem caused by a lack of investment—whether diversionary routes or different types of maintenance regimes—before one goes down the compensation route. I think that these amendments could achieve that. I agree that the network code can be changed and we are returning to the discussion that we have had many times this afternoon about government interference on the railways, which is probably not surprising given the amount of money that has been put into the railways.
	However, there is also the question of changes of mind. Some very nice new trains were ordered for Midland Mainline to run a service to Leeds. The SRA asked the passenger train operator to approve these trains and then, after they had been delivered, the SRA changed its mind. The trains are now sitting in a siding, and I read recently that they may have to have their bogies changed and be sent to Ireland to run a service there. It is nice that they are being used because otherwise some company, be it the train operator or the leasing company, will lose a lot of money. That is just one example. It is not directly related to this matter, but it could have been related. We have to accept that governments will change their mind, especially when so much money is involved.
	This amendment is a very reasonable means of ensuring that, if the Government do change their mind and cut the money, with adverse consequences to the companies involved, those companies should be able to get compensation if there are no mitigating circumstances. That should be included in the Bill rather than having to pursue various different codes or other routes through the regulator. Including the measure in the Bill means that it is there and people can go directly to it. There is a good structure to this amendment. It needs a bit more reading on my part, but, on the whole, it is a good idea and I support it.

Lord Davies of Oldham: My Lords, I am grateful to noble Lords who have spoken in this debate on a complex area. I hope that I am able to establish the wisdom of the noble Viscount, Lord Astor, withdrawing his amendment at the conclusion of the short debate because I fear that it leads us into very difficult areas in terms of political controversy. Certainly, if there should prove to be a general election this year he might find that this amendment places him in a somewhat invidious and difficult position. Let me establish why that is so.
	First, I share with all noble Lords who have contributed to this debate the obvious concern that operators must have in regarding the potential impact of a future access charges review on their businesses. That is a proper concern that has been articulated in all three contributions to the debates. We are keen to provide operators with certainty that they will receive mitigation or compensation should their businesses be affected by these processes. We have made public an exchange of letters between the Secretary of State and the Office of Rail Regulation to that effect. We are continuing to work with the industry to ensure that access contracts and the Network Code deal as effectively as possible with this issue. But as I have said before, the fact remains that these are issues best dealt with through clear contractual processes and not through legislation.
	The amendment attempts to deal with issues of compensation and mitigation which are currently, and more properly, dealt with in access agreements—for example those between Network Rail and train operators. Those contracts have been in place for more than ten years and are well understood by the parties; they have been developed, and continue to develop where weaknesses in the arrangements are discovered. The ORR approves all access agreements and when conducting an access charges review does so in the full knowledge of their contents. Therefore, where a possible consequence of a review is a change to the network which could affect access rights—the main concern of this amendment—and thus lead to the need for mitigation or compensation, the ORR would take that into account in its considerations.
	The Secretary of State has recognised the concerns of some operators, and confirmed in his letter to the chairman of the ORR of 28 February that he would be asking in his general guidance to the ORR that it make explicit any consideration of compensation during an access charges review. I would like to remind the House that, as we discussed on a previous amendment, access charges reviews are carried out in a wholly transparent, public and consultative way, and that this consideration would be available to anyone who was interested in the issue.
	We accept that franchise agreements would need to be varied in the event that, as a consequence of inadequate funding being available for all outputs from the network, franchise obligations in respect of service level and quality would be made undeliverable.
	There are some real problems with the amendment tabled by the noble Viscount and I counsel caution. The amendment would effectively provide that the cost of compensation would be met out of public funds. In conducting an access charges review, the ORR determines Network Rail's overall funding requirement, which is met through track access charges and network grant. Part of this funding requirement will be funding for compensation, which will feed through to some proportion of access charges. The train operators' ability to pay access charges comes both from subsidy and their other income sources. I assume that by "adequate compensation" the noble Viscount means the compensation which is due under the access contracts.
	Subsection (2D) of Amendment No. 3A would oblige the Secretary of State to increase public financial resources to secure what he and the Scottish Ministers want to be achieved as opposed to the situation envisaged by the Bill, that the ORR will determine how much of what is wanted can be afforded for the purposes of the access charges review. Subsection (2D) would also have the, presumably unintended, impact of making the Secretary of State pick up the funding shortfall between what the Scottish Ministers want to be achieved and the budget specified by them. Under the amendment the gap could be filled only by the British taxpayer picking up the bill.
	It should be for Parliament, not an independent regulator, to determine how much taxpayers' money is spent on the railways. That is not the role of the independent regulator. Every week the Government spend £73 million on the railways. Is the noble Viscount, Lord Astor, really suggesting that the Government should not be able to set the budget for the railways? Would a future government really be prepared to write a blank cheque for the railways, because that would be the effect of the amendment?

Viscount Astor: My Lords, I am grateful to the Minister for giving way. I am always prepared to accept drafting lessons as this is a complicated area. However, I believe that the noble Lord may have misinterpreted my amendment, or perhaps my amendment is not sufficiently clear. Under the terms of the amendment public funds would be used only where mismatches occurred; that is, if franchisees were unable to deliver their existing contracts due to changes in the Secretary of State's spending on the network; in other words, where it was impossible for them to fulfil their contracts. However, if the ORR allowed those contracts to be changed so that there was no such mismatch, there would be no burden on the public purse.

Lord Davies of Oldham: My Lords, I understand that but it does not alter the burden of my case against the amendment. The problem is that it would shift the position with regard to what we are trying to achieve in the Bill—which is that the ORR will determine how much of what is wanted can be afforded—into a situation where the Secretary of State would pick up the tab for compensation where failure had occurred. That would be the impact and effect of the amendment. I am not quibbling about a small drafting point. I have always been grateful for the generosity of the noble Viscount, Lord Astor, when, from time to time, we have nitpicked about certain amendments from the perspective of the greater resources that are available to us than may be available to noble Lords on the opposite side of the House. However, this is a point of principle on the question of the resources that are allocated to the railway. The amendment is explicit in subsection (2D) which states that,
	"the Secretary of State shall ensure that public financial resources shall be increased"
	to pick up the bill for a shortfall in compensation for decisions taken in regard to Scotland. That cannot make sense as regards what is sought in the Bill.
	I entirely concede the point that all three speakers who contributed to this debate emphasised. Of course, I recognise the obligation to have security within the industry regarding compensation in circumstances where changes are effected which have deleterious consequences. The amendment would not lead to the writing of cheques for staggering sums because we would not expect to see such a situation develop too often. Nevertheless, the principle behind the amendment is that the Secretary of State may be confronted with the need to write a blank cheque regarding compensation. That surely cannot be the intention of those who see merit in the Bill and that is why I reject that absolutely fundamental point.
	I turn to Amendment No. 6, which is grouped with the amendment that we are discussing. My noble friend Lord Berkeley referred to Amendment No. 6. As noble Lords are aware, Section 21 of the Railways Act 1993 allows the ORR to prepare and publish model clauses for inclusion into track access agreements as it considers necessary. This amendment would introduce no new powers, nor, as it is permissive in nature, create new obligations on the ORR to prepare such a model clause. Section 21 of the 1993 Act is wide enough to permit the ORR to prepare and publish model clauses on this subject if it considers it appropriate to do so. We recognise the thrust behind the amendment but we have the legislative power to meet the relevant requirement. Therefore, Amendment No. 6 is unnecessary.

Viscount Astor: My Lords, I am grateful to the Minister for his reply. I tabled this amendment late on Friday and he may not have had time to consider it with his usual care. The noble Lord claims that the amendment would result in blank cheques being written. However, that is not the case. The amendment would do nothing of the sort. I am afraid that the noble Lord misinterprets the amendment. The only situation in which the Secretary of State would pick up the bill is if he did something which diminished the rights of those who held contracts. That is all. The difficulty that we have is that the Government can cut with one hand, but those who have contracts will not be able to fulfil those contracts because of the cuts made by the Government. There is no mechanism under the Bill in that situation for ensuring that those rights are protected. The Minister did not really address that point, nor did he adequately explain how those rights should be protected.
	I will obviously consider carefully what the Minister has said, and I hope that he will also carefully consider my response. He may be able to address those issues further, and we may be able to have some conversations about them before we get to the final stages of the Bill. I am not trying to give a blank cheque to anyone; I would be the last person to do that. I hope that the Minister will understand that that is the last thing that we on this side of the House want to do. There is not adequate protection in the Bill, which is an important problem. We feel obliged to insist on that at some point. Obviously, I want to try to be reasonable; the Government want the Bill, and we support the Bill in principle. I hope that, over what may be a fairly short period of time in the next few days, we may find some way of agreeing.
	I shall withdraw the amendment, I shall put it down for Third Reading, and in the mean time we shall see whether we can have any conversations that allow us to come to some agreement. I see that the Minister wishes to rise.

Lord Davies of Oldham: My Lords, before the noble Lord sits down, of course I am only too prepared to discuss this issue further. He will recognise that we have a significant difference over this point. If it is a question of an element of misinterpretation, we may make progress. I shall be only too pleased to meet him.

Viscount Astor: My Lords, as always I am grateful to the Minister. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 4 and 5 not moved.]

Lord Bradshaw: had given notice of his intention to move Amendment No. 6:
	Page 98, line 20, at end insert—
	:TITLE3:"Consequential amendment to the 1993 Act
	In section 21 of the 1993 Act, at the end of subsection (1) (which gives the Office of Rail Regulation the power to prepare model clauses for access agreements), insert "including a model clause providing for compensation for or mitigation of the effects of an access charges review under Schedule 4A."

Lord Bradshaw: My Lords, so far as Amendments Nos. 5 and 6, which are in my name, are concerned, we wait to hear the outcome of the discussions with the noble Viscount, Lord Astor. We will reconsider them at Third Reading.

[Amendment No. 6 not moved.]
	Clause 13 [Railway functions of Passenger Transport Executives]:

Lord Morris of Manchester: moved Amendment No. 7:
	Page 12, line 10, at end insert—
	"(1A) An Executive, that has been consulted under subsection (1) in relation to a franchise agreement where the services to be provided under the agreement are or include services for the carriage of passengers by railway within the passenger transport area of that Executive, may, before the expiry of a period of 60 days following the date on which that consultation began, make a statement to the Secretary of State specifying—
	(a) the services for the carriage of passengers by railway which the Passenger Transport Authority for the area in question considers it appropriate to secure to meet any public transport requirements within that area, so far as relating to the provision of services of the same description as those to be provided under the franchise agreement in question;
	(b) any minimum level of quality to which any services so specified are to be provided;
	(c) any requirements with respect to the fares to be charged to persons using any services so specified; and
	(d) any minimum level of quality with respect to the operation of any station within the area in question which may be required by any such franchise agreement.
	(1B) Where a Passenger Transport Executive for an area in England submits a statement under subsection (1A), the Secretary of State shall ensure that the services, and any minimum levels of quality or requirements with respect to fares, specified in that statement are provided for in any franchise agreement into which he may enter in respect of the services in which the Executive have an interest.
	(1C) The Secretary of State need not do anything under subsection (1B) if or to the extent that it would—
	(a) have an adverse effect on the provision of services for the carriage of passengers or goods by railway (whether inside or outside the area in question); or
	(b) increase the amount of any expenditure of the Secretary of State in respect of railways under agreements or any other arrangements entered into with any franchise operator, any franchisee, or any servant, agent of independent contractor of a franchise operator or franchisee, and the Secretary of State considers that the Executive would not fund that increased expenditure."

Lord Morris of Manchester: My Lords, in moving Amendment No. 7, which stands in my name and those of other noble Lords, I shall speak also to Amendments Nos. 8, 9 and 10.
	We have, of course, been here before. At Second Reading, I drew attention to the concerns of passenger transport executives—PTEs—about the Bill's effects on their ability to ensure that the public transport needs of their areas are met. In pressing their case for what these amendments now seek to achieve I was supported by, among other noble Lords, my noble friends Lord Burlison and Lord Faulkner and the noble Baroness, Lady Scott, speaking for the Liberal Democrats.
	The PTEs' case won further strong support in Grand Committee—when regrettably I was hors de combat—and notably from the noble Lord, Lord Bradshaw, who initiated the debate there on 3 March; from my noble friends Lord Snape and Lord Berkeley; and from the noble Viscount, Lord Astor.
	I found two of their speeches deeply evocative. First, that of the noble Lord, Lord Bradshaw, who with his long involvement in public passenger transport management, paid warm tribute to the memory of the redoubtable Lord Sefton of Garston. He said:
	"I was divisional manager in Liverpool in 1973, when the Merseyside PTE built the loop and link system . . . That came about through the energies of Bill Sefton, who then became Lord Sefton and who as PTE chairman went to Downing Street and banged on the door and got the money".—[Official Report, 3/3/05; col. GC160.]
	Some 22 years before then, Bill Sefton was my parliamentary agent when, as Labour's youngest candidate in the 1951 general election, I contested the Garston division of Liverpool. The kindly tribute made by the noble Lord, Lord Bradshaw, to Bill's achievements in this policy area left me reflecting on how extremely serious it would have been for the people of Merseyside had his mission to Downing Street failed.
	Perhaps I could leave it to the noble Lord, Lord Bradshaw, to explain just how fortunate those who instructed this Bill's draftsmen are that my late and still widely mourned parliamentary agent is not here to back these amendments today.
	The other speech I found so evocative was that of my noble friend Lord Snape. I have known him as someone well worth listening to on public transport issues since the 1970s. Not only did he work on the railways from boyhood, but he was involved in them from birth. His father, whom I also knew well, was a highly regarded representative of railwaymen.
	The speech made by my noble friend in Committee exploded the myth that the Bill as now drafted would speed up negotiations between franchisees and PTEs. In truth, as he said, it would considerably prolong them. He was demonstrably right also to stress that, in sharp contrast to the pledge in last year's White Paper to devolve responsibilities to the PTEs, decision-making would be centralised rather than devolved.
	That contrast is highlighted by the publication this morning of the Commons' Transport Committee's report on light rail, with its pointed criticism of current limits on local power outside London to control local bus services. The report says they have,
	"hindered the development of integrated transport systems".
	The Select Committee calls for more local decision-making, not less, to secure integration; and the rights of PTEs to prescribe their own rail services are a prerequisite of successful integration. Surely none of us here wants now to compound the problems so clearly identified by the Select Committee.
	It is because the case made for the amendments at Second Reading was so strongly reinforced in Committee that it need not be restated at length today. We debate them now, however, in a much different parliamentary setting. I refer to the imminence of a general election, and the involvement of all parties in deciding which of the Bills currently before Parliament can still by agreement be enacted in the days left before dissolution.
	Thus we need to know today, in detail and in this debate, not only the Government's position on the Bill's future—which I am sure will be clearly stated by my noble friend Lord Davies—but that of each of the Opposition parties. Is the Government's position that they will withdraw the Bill if these amendments are carried, or simply that they would prefer the Bill not to include them? Are the other parties determined not to allow the Bill to become law without them? We need to know exactly where we stand with all parties in advance of the haggling soon to begin.
	I am now in my fourteenth Parliament and, as a Front-Bencher for 23 of my 33 years in the House of Commons, I had much direct involvement in pre-dissolution haggling. Time and again over the years I heard junior Ministers threaten to drop Bills rather than accept amendments, only to be left eating their own words on instruction from on high. The essential needs always are for candour and clarity from all parties; and never were they needed more than in the case of these amendments today.
	Amendment No. 7 would introduce three new sub-sections into Clause 13 to preserve current PTE powers to specify local rail services, and to have them incorporated in franchise agreements. One serious concern about the Bill is that, despite repeated assurances by Ministers to consult them, there is still nothing in its provisions to ensure that the views of PTEs will be taken into account or worked into franchise agreements.
	Amendment No. 10 makes it clear that a PTE may not specify services for franchises that include services only to and from its own area. This clarification was made in direct response to the concerns raised by the Minister in another place, and I trust that my noble friend will accept it.
	Amendment No. 8 would preserve PTEs' existing powers to be parties to franchise agreements. When this issue was addressed in Committee the Government's response was totally unconvincing. It was based on a mistaken assumption that co-signatory status for PTEs involved additional costs and complexities that would outweigh the benefits of PTE involvement. The outcome has been further to increase all-party support for the amendment.
	Co-signatory status on rail franchise agreements is crucial in providing PTEs with important rights of benefit to passengers. They include: the right to consultation on service changes; the right to approve increases in local fares above regulated levels; the right to require participation in multi-modal ticketing schemes, integrated transport schemes and concessionary travel arrangements; the right to receive performance information on punctuality, cancellations and provision of capacity; and the right to be consulted on de-staffing of local stations and improvements to access for disabled people.
	Amendment No. 9 deals with disputes and the need to preserve current statutory provision for the Secretary of State to disapply the Strategic Rail Authority's obligations and PTEs' rights under Section 34 of the Railways Act 1993 where any dispute is referred to him. Again, this amendment is in response to concern expressed at the Bill's earlier stages and bears further testimony to the readiness of PTEs to listen and respond reasonably.
	Taken together, the amendments would allow PTEs to vouchsafe the best possible transport services for their areas. Failure to accept them would gravely damage their ability to do so.
	Yet there is a further compelling reason for these amendments to be accepted. I refer to the proceedings on the Bill in another place on 27 January. MPs from Greater Manchester had tabled amendments of the same effect as those that we are now debating. In doing so, they were reflecting serious public concern all across the conurbation about the threat the Bill constitutes to local decision-making on public transport. All their amendments were guillotined. In the words of one MP, they were,
	"unceremoniously dumped in the wheely-bins of Westminster".
	Thus the only way for Greater Manchester MPs to have any say on an issue of such high importance to thousands of their constituents is for these amendments to be incorporated in the Bill as it returns to the House of Commons.
	Nothing could explain more succinctly, or more starkly, the importance of the role of this House vis-à-vis the Bill. I hope the amendments can be accepted, not after haggling behind closed doors but here, by open agreement, on the Floor of the House of Lords today. I beg to move.

Lord Bradshaw: My Lords, I support very warmly what has been said by the noble Lord. I am also grateful for his tributes to Bill Sefton, who was known to me over a long period as someone who avidly worked—I mean worked—for the people of Merseyside and would never accept so much as a cheese sandwich in response to all his efforts. He was a true public servant of the sort that we should all try to emulate.
	The amendment goes to the very heart of what we are talking about—local decision-making of people elected by people who live away from London. It is essential that we build on local decision-making. We must also appreciate that those people will become funders of railway services as well as designers. I think that it was Wilkes who said, "No taxation without representation", which holds very firm. If they are going to pay, they should be co-signatories. I cannot see what the Secretary of State is doing in trying to take away from people the right to have their say and actually be co-signatories to a franchise agreement that affects them intimately. We in Westminster are not talking about somewhere remote up in Manchester or Leeds; if you happen to live there, it is your train service that is affected, not something that is 200, 300 or 400 miles away. I cannot see why the Secretary of State wishes to be so intimately involved with those franchises.
	Earlier this afternoon, I was talking to a member of the Greater Manchester PTE. He said, "In the negotiations with the franchise-holders of the Northern Rail franchise, if we were not co-signatories we would not be at the table talking to them about punctuality, reliability, stations and collecting fares". You need not only someone who pays, but someone who is your gamekeeper on the spot to see that the large sums of money dispensed are actually spent on what people want. I am at a loss to understand why the Government resist that so much.
	I do not know whether the noble Lord proposes to press the amendment to a vote today. He is no doubt aware that, if he does so, he will have the support of noble Lords on these Benches, as the noble Baroness, Lady Scott of Needham Market, said earlier. I promise that, if he chooses to wait until Third Reading in the hope that Ministers will reflect on what he has to say, he will be supported then; he may be able to muster more troops to support him. If people will listen to the arguments rather than just be shepherded through the Lobbies, they will understand the strength of feeling about the issue.
	Through their long history, the PTEs have been very good at investing money in the railway. When there has been a famine of investment, they have often been the one body producing new stations, rolling stock and ideas. They are a force for good. Occasionally Ministers may be irritated by the likes of the Strathclyde PTE in 1997 playing political games to hold up a couple of franchises, but that is not the usual way in which they behave. In a spirit of compromise, could the Minister not even allow the PTEs to be co-signatories and say to them, "You'll get so long to sign. If you hang up your signature for a year or two years, you cannot expect to be co-signatories. However, if you come forward to negotiations and sign at the end of them, you should be co-signatories. You should be the people who represent the local users of the service and determine whether the taxpayer is getting value for money"?
	This is a signal issue that puts on trial the Secretary of State's real wishes about whether he wants a railway that we all own, or one that is governed only by the people over there in Marsham Street.

Lord Burlison: My Lords, I support my noble friend Lord Morris of Manchester in bringing forward the amendments. I agree very much with what he seeks to achieve, and I too urge the Minister to consider that the changes be incorporated in the Bill this afternoon. I would like to make two short contributions on the issues of service specification and rail franchise co-signatory status.
	I maintain that the Government should not be removing PTE specification powers and centralising decisions on local rail services within the Department for Transport. The PTEs do not accept the Government's view that—I quote the Minister's words at Second Reading—the present arrangements for PTEs,
	"give responsibility without the commensurate accountability".—[Official Report, 10/2/05; col. 931.]
	It has been difficult for the Government to dig up examples of how PTEs have required changes to specifications that have led to increased costs. I have heard only one such example—the extreme case involving the new rolling stock in West Yorkshire PTE.
	PTEs have no right for their increased franchise payments to be reimbursed through SRA grant or through any other funding channel. Indeed, it has been made clear that any increase in services required by a PTE at any time will not be funded by the SRA unless expressly approved. It has also been made clear that PTE rail funding may in future be reduced, which would leave PTEs to meet rail costs themselves if they chose not to reduce services accordingly.
	In both the west Midlands and west Yorkshire, the PTEs have directly funded the provision of additional rolling stock above the level at which the SRA would otherwise have funded it. So, it is nonsense to suggest that the PTEs make all sorts of wild and unreasonable requests, leaving others to pick up the tab. I hope that my noble friend the Minister is prepared to concede that point and to accept the amendments.
	I fail to understand the Government's position on rail franchise co-signatory arrangements. Replacing the existing rights of PTEs to change services and fares with separately negotiated contracts for individual service changes does not reduce complexity or bureaucracy. It simply does not. If the Bill were to pass into law as drafted, PTEs would have to support local rail services by way of separate contractual arrangements with the Secretary of State and with franchisees. Surely, anyone can see that that would result in additional contractual complexity and inefficiency while weakening the PTEs' contractual position.
	How would it work in practice? In the case of the northern franchise, it would have resulted in the franchisee entering into five additional contracts, each potentially relating to different aspects of the franchised services, in place of a single "all parties" agreement. The scope for contractual conflicts is substantial and the additional administrative burden and bureaucracy immense.
	The PTEs have accepted the assurances that they will remain co-signatories to current franchise agreements, although the northern franchise is to be subject to review in the light of a proposed significant re-specification in 2006. However, Clause 14(3)(a) would give the SRA the contractual right to remove PTEs from the northern franchise agreement within three months of the legislation coming into force, irrespective of the position of the Minister. To date, the SRA has given no assurance that it would not seek to exercise that contractual right. What are the PTEs to make of that? Can my noble friend the Minister give the PTEs that categorical assurance this afternoon?
	I hope that the powerful case made at every stage during the progress of the Bill will convince the Minister of the strength of feeling on these issues. I fear that I may have spoken for longer than I had intended, but I hope that the arguments put forward today and at earlier stages by noble Lords from all parts of the House will find favour with the Government, and I urge them to accept the amendments.

Lord Snape: My Lords, I start by declaring an interest as an employee of the National Express Group. I do not wish to detain your Lordships for more than a few moments, because the matter was debated extensively in Committee. I am grateful to my noble friend Lord Morris of Manchester for his kind words about my contribution at that stage.
	Governments regularly do things that many of us in this House and the other place find baffling. We are, of course, expected to support the government to whom we give our political allegiance, although we may be baffled, but I must confess that I cannot understand the Government's view of this matter. A government who profess to want to listen to the voice of local democracy should not behave in this way regarding PTEs.
	I make no special claim to any greater experience than anyone else in your Lordships' House. Although I have been here only a short time, I am aware of the danger of so doing. But I pointed out in Committee—I do not wish to repeat anything that I said there—that, as an employee of the National Express Group, I joined the team that was successful in gaining the Central Trains franchise eight or nine years ago, and we were subjected to some thorough cross-examination by PTE and PTA members at that time.
	I can also claim, as my noble friend reminded me, that I was, although it was 30 years ago, a member of the somewhat clumsily named, South East Lancashire and North East Cheshire PTA. Again, at that time, in the aftermath of many of the cutbacks of the Beeching era, that PTA in that area fought not just to preserve the local services that remained, following the ravages of the good or not-so-good Dr Beeching, but to increase those services. We are seeing a similar pattern emerge throughout the PTE areas in the United Kingdom.
	North of the Border, where the Scots have their own Executive and PTE—perhaps they are doubly blessed—there has been enormous progress towards reopening long-closed stretches of railway line. Indeed, in the past few weeks, the wide-scale reopening of the Waverley line has been announced. Are we seriously considering that such advances would be made if these matters were left to the Department for Transport—whatever it is called, wherever it is based and whichever government is in power? I doubt that such a happy situation would come about in those circumstances. Sometimes it seems to me that Ministers, in whatever government, and their civil servants, regardless of government, are most concerned to see that their own services, inevitably based in London and the south-east, are not just preserved, but extended. That fleet of ministerial cars does not just bring Ministers to their departments, it brings many civil servants, and it can regularly be seen parked outside main line stations in this city.
	Yet, as the noble Lord, Lord Bradshaw, reminded us, matters outside London are all too often seen as being "somewhere else" and "someone else's problem". Yet, the very people whose voices should be heard in the planning and expansion of their rail services will, if the Government fail to accept the amendments, not be heard. Their experiences will be discounted and, despite being answerable to their electorates, they will obviously play no part in the planning of rail services in their areas.
	I cannot believe that that is what my noble friend on the Front Bench believes, although I do not know what it might say in the brief that he must deliver on behalf of the department. My noble friend and I have been friends for many years—although I might be straining that bond by my comments. After all, if I remember correctly, we were founder members of a football team in the other place. I might well receive a good kicking as a result of my contribution today. Seriously, I cannot believe that a Labour Government can behave in this way towards passenger transport executives, who have brought not only their money and expertise to local rail services in their areas—throughout the UK—but have brought the wishes of their electors to bear in improving those rail services.
	I am not sure what my noble friend's intentions are with regard to the amendment. However, whether or not the negotiations, about which I continue to hear a great deal, take place in the next few days, I hope that the Government will look again at the matter and ensure that the voice of local democracy is not only heard but is preserved for the future.

Viscount Astor: My Lords, I did not realise that the noble Lord, Lord Snape, and the Minister were such famous footballers. I hope that the Minister is not about to score an own-goal—probably for the first time. I hesitated to rise in an internal Labour debate, but as the noble Lord, Lord Bradshaw, intervened perhaps I should.
	The Government's position is correctly described as "baffling". When we discussed the matter in Grand Committee, a number of points were made. On re-reading the debate, I realise that I had not gained a clear understanding of the Government's position. I do not understand why they do not want PTEs to be co-signatories of franchises which they are part funding. I do not understand the explanation.
	There have been criticisms of PTEs. Some train operating companies have said that PTEs exacerbate the situation and make it more difficult for a service to be established. They say that negotiations take longer, the procedure does not work and it mucks up the system. Equally, there have been criticisms by those who represent passengers that PTEs do not do enough. Under the Bill, a rail passengers council will be created and the rail passenger's committee will be abolished. There are genuine criticisms of PTEs.
	I shall listen carefully to what the Minister says. I am sympathetic to the point made by the noble Lord, Lord Morris of Manchester. I am not yet 100 per cent convinced because I want to hear what the Government say. Perhaps I am as baffled as anyone about where they are coming from because it seems that they are taking away local responsibility and centralising it.
	The noble Lord, Lord Bradshaw, made an interesting point suggesting a period of time after which, if PTEs are not co-signatories, they would drop out of the loop. I shall be interested to hear the Minister's views on that suggestion: on when consultation starts and stops. There may be a way through and perhaps it should be discussed between now and Third Reading. I do not know what the noble Lord, Lord Morris, intends to do and we will listen closely. We have not yet been quite convinced by the Minister's replies, but we have some genuine questions which need answering before I can say to the noble Lord, Lord Morris, that we will march through the Division Lobbies. And looking behind me, perhaps I may suggest to him that I do not have quite as many passengers in the carriage behind me as I need to get there. One would need to fill the train first. I look forward to the Minister's response.

Lord Faulkner of Worcester: My Lords, I intend to intervene only briefly. I fully support the remarks made by my noble friends Lord Morris of Manchester, Lord Burlison and Lord Snape and the noble Lord, Lord Bradshaw. In Grand Committee, we had a good debate about the role of the PTEs and their achievements and I do not want to go over that ground again.
	There is one aspect of the Government's approach which I find most puzzling. If the PTEs had demonstrably failed the people they exist to serve, if they had not provided new rail services, if they had not opened up new opportunities for people to travel by train and to leave their cars at home, and if they had provided a service which recorded huge levels of dissatisfaction among the public, one could understand why the Government would want to take away their powers as co-signatories to franchises. However, it is demonstrably not the case that they have failed.
	As the noble Viscount says, there have been some irritations on the part of train operating companies over the speed with which some of the franchises have been signed. That is normally because the PTEs are attempting to wring out of the franchisees—the train operating companies—a higher level of service than that which they wanted to provide. An example is the delay of the signing of the Scottish franchise and the wish of the Strathclyde PTE to continue the service of through trains between Glasgow and Leeds—an aspiration with which I have considerable sympathy.
	One should look at the record elsewhere. Last week, I was in west Yorkshire and saw the Airedale line at first hand. It has benefited from new rolling stock and has achieved huge increases in ridership. Now 75 per cent of the people travelling to Leeds in that corridor do so by train as a result of the improved service, the re-opening of stations, increased safety at stations and an attractive package of fares. That is the kind of railway service which we should be encouraging. I am afraid that if the co-signatory powers are removed, it will be much more difficult to achieve that.
	I hope that my noble friend will take account of what has been said today and of what was said in Grand Committee. I hope that in the final stages of the Bill he will indicate that the Government accept the logic of what we have all been saying.

Lord Davies of Oldham: My Lords, to paraphrase the old saying, I can look after the Opposition but God protect me from my friends! This has been an interesting debate and we have gone over much of the ground we covered in Committee. The points of difference remain between us but not because in any way I seek to gainsay the achievements and activities of PTEs. That is not the nature of the argument. As my noble friend Lord Morris would recognise, I would be the last person to decry past achievements, including those on Merseyside by Lord Sefton who was responsible for that area when in local government. I recognise those achievements, but I want to put the role of the PTEs into a new context which is envisaged by the Bill.
	The Government are altering the current rail arrangements with respect to PTEs because the current system was built for a different time and does not fit with the ambitions set out in the rail White Paper. The Government are attempting to build a structure which works for the future and not to recreate the past. If I can express it pithily, forward not back. Crucial to the structure set out in the rail White Paper, the Secretary of State will be responsible for setting the strategic direction and the amount of national funding which will be invested in the railways. The system which the PTEs are seeking to retain cuts across that structure.
	That is not to deny the PTEs having a role within the new structure and I shall delineate that role in a moment. However, I want to demolish the notion that within the new framework it would be appropriate to retain the PTEs and their powers as they were. Of course we are sympathetic to the concerns of passenger transport executives. When the rail White Paper was published in July last year, it was announced that the PTEs would not be a direct party to franchise agreements under any circumstances. However, before the Bill was introduced in November, the Government, having listened to the arguments of the PTEs, concluded that it should include a provision, which we now have, to allow the PTEs to be party to franchise agreements at the invitation of the Secretary of State.
	Our problem is straightforward. The amendment which my noble friend proposes would allow passenger transport executives to dictate to the Secretary of State, who is responsible for rail across the whole country, what services should be provided in their area. I recognise that there is some protection against that as subsection (1C) of the amendment allows the Secretary of State not to take on board those proposals if it would,
	"have an adverse effect on the provision of services for the carriage of passengers or goods by railway",
	or if it would increase the amount of expenditure on the railways. However—and this is the crucial point—it would be for the Secretary of State to prove that these tests had been met. If it was disputed by the PTE, we could end up in protracted negotiations which could, ultimately, have to be decided by a court. Delay costs money—taxpayers' money—and we are eager to reduce those costs.
	The new provisions are based on the premise that what we had in the past was an adversarial arrangement which would perpetuate and exacerbate the old system, in which some PTEs have used the fact that they have to co-sign a franchise before it can be let as a powerful lever in their negotiations with the SRA. I reassure my noble friend Lord Burlison that there is no question of the PTE for the northern franchise being excluded from that position until a review is completed. There is no question of peremptory action in those terms. But that powerful lever has been used by PTEs in their negotiations with the SRA, and we do not want that replicated in respect of the Secretary of State.
	We should be aware of the extent to which PTEs have made significant contributions in the past, and we want them to continue with those contributions, but within a new framework, based not on the adversarial relationship but one in which there is co-operation and a partnership approach, with clear financial accountability for decisions taken. The new system set out in the White Paper matches responsibility with accountability. The Secretary of State will consult the PTEs before issuing an invitation to tender for any franchise that includes services to, from or within a PTE's area. Therefore, the PTEs will have a clear opportunity to set out the needs and ambitions of their areas and the Secretary of State will be required to balance the needs of the PTEs with the needs of the wider franchise and the wider network, which is something that the PTEs have neither the ability nor the responsibility to do. That is the Secretary of State's responsibility, and his role as a funder for the majority of the system. He also has accountability to Parliament for the overall strategy and development with regard to the railway, which has been the subject of debates under previous amendments this afternoon.
	Once the baseline specification for a franchise, including services in PTE areas, has been set, the PTEs will also have the right to amend the services in their areas—buying additional services or reducing services or retaining the services. That will give PTEs the flexibility to make choices about the balance of transport in their areas, and allow them to make rational decisions based on financial accountability. I contend that that is a clear improvement on the present system.

Lord Bradshaw: My Lords, is what the Minister has just outlined almost like saying that the Secretary of State will say, "Look, there is this much money available, I know it is less than you want, and what you will effectively be given the job of doing is to decide what bus substitution will replace railway services"? Is not that what he has just said?

Lord Davies of Oldham: My Lords, I have not said that at all—it will be for the PTE to decide. Of course, it may in some circumstances reach the decision that a bus system is preferable to rail. PTEs have done that in the past, under the existing structure, and there is nothing about the amendment, if it were passed and inserted into the Bill, that would change that position.
	Let me make it clear that we are not talking about investment in the system. It is not the case that with PTEs and the present structure there will be the capacity for greater investment in the system, and under our system, when the Secretary of State assumes responsibility—but in fact is concerned to consult PTEs—that investment will thereby be reduced. I hear what the noble Lord, Lord Bradshaw, is suggesting, which is the pejorative view of the situation—that it leads to closure. Why should it?
	As my noble friends have articulated, PTEs are extremely good at defining the priorities of their areas and, in circumstances when they have done so in the past and will continue to be able to do in future, at expanding services when they are prepared to meet costs. But that is the basis of financial accountability. It surely cannot be contended that it is a rational system in which people can take decisions and the national taxpayer must pick up the tab, regardless of what those decisions are.

Lord Snape: My Lords, before my noble friend leaves that point, can he tell me what the difference is between a PTE agreeing to spend some of its own resources on providing better rail services and that PTE having the right to say to a franchisee that it should provide the services, provided they could come to some agreement? What is the basis of his view that PTEs can do the one thing but should not be allowed to do the other?

Lord Davies of Oldham: My Lords, PTEs can do that because the franchise is wider than just that particular provision. The Secretary of State has responsibility with regard to the overall franchise. What has happened in the past, as my noble friend will recognise, is that PTEs as co-signatories have been able to indicate that unless certain requirements have been met, their co-signature will not be forthcoming. Effectively, there can operate a degree of veto, while not having the overall responsibility for the consequences of that franchise not having been achieved. The responsibility for that—as envisaged in the whole of the Bill; indeed, it is what the Bill is about—is the responsibility of the Secretary of State.
	Within this framework the Government are not seeking to reduce the constructive role of the PTEs. We all recognise the virtue and value of local contributions in those terms. That is why I am hopeful that my noble friend will withdraw his amendment. The old system produced a degree of adversarial challenge about the allocation of resources and decisions, while the new system is based on co-operation and partnership. It is on that basis that we intend to go forward.

Viscount Astor: My Lords, could the Minister say whether the Government consider that in its new role with regard to rail, Transport for London is being put on the same basis as PTEs and will be treated in the same way, or will it be different? I would be grateful if the Minister could answer that question.

Lord Davies of Oldham: My Lords, there is a specific clause with regard to Transport for London and extending the area of its authority, as the noble Viscount will recognise. In the concept of the Bill, what is being envisaged is a system in which there is an effective partnership with those with local responsibilities. On that basis, I hope that my noble friend will recognise the virtues of that and withdraw his amendment.

Lord Morris of Manchester: My Lords, I am deeply grateful to have received the wide-ranging support of so many of my colleagues for the amendments. I am grateful also to the noble Lords opposite who contributed to the debate. It has been an informed one reflecting considerable credit on this House.
	Noble Lords were virtually unanimous in supporting the PTEs' case. That must have been noted by my noble friend Lord Davies, and I hope it will be urgently communicated to his ministerial colleagues.
	Indications I have had during the debate are that there may be some value in further consultation between us before proceedings on the Bill are concluded. I very much hope that a settlement can be achieved that the PTEs can accept and that we can honourably put to them as worthy as acceptance. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 8 to 10 not moved.]

The Earl of Mar and Kellie: moved Amendment No. 11:
	After Clause 13, insert the following new clause—
	"RAILWAY FUNCTIONS OF PASSENGER TRANSPORT EXECUTIVES IN SCOTLAND
	(1) Before—
	(a) issuing an invitation to tender for a franchise agreement in a case in which the services to be provided under the agreement are to include services in which a Passenger Transport Executive for an area in Scotland has an interest, or
	(b) entering into a franchise agreement in respect of such services in a case in which no such invitation has been issued,
	the Scottish Ministers must consult the Passenger Transport Executive for that area.
	(2) For the purposes of subsection (1), the services in which a Passenger Transport Executive has an interest are—
	(a) services for the carriage of passengers by railway within the passenger transport area of that Executive; and
	(b) services which are not such services but are services for the carriage of passengers by railway to or from such an area.
	(3) A Passenger Transport Executive for a passenger transport area in Scotland and the Scottish Ministers may enter into arrangements under which one or both of the following occurs—
	(a) sums become due from the Executive to the Scottish Ministers in respect of services for the carriage of passengers by railway within that area or in respect of station services or bus substitution services provided within that area; and
	(b) the Scottish Ministers undertake to exercise or perform their powers and duties in relation to or in connection with such services in a particular way.
	(4) A Passenger Transport Executive for a passenger transport area in Scotland may enter into agreements for purposes relating to or connected with the provisions, by a person who is a franchisee or franchise operator in relation to a franchise agreement, of—
	(a) services for the carriage of passengers by railway within that area; and
	(b) station services provided for purposes connected with any such services.
	(5) A Passenger Transport Executive for a passenger transport area in Scotland may not enter into an agreement (whether by virtue of subsection (4) or otherwise)—
	(a) with a person who is a franchisee or franchise operator in relation to a franchise agreement, or
	(b) with a person who is proposing to become such a franchisee or franchise operator, unless the agreement is approved by the Scottish Ministers.
	(6) The Scottish Minister may—
	(a) give a general approval for the purposes of subsection (5) in relation to a description of agreements, as well as specific approvals for particular agreements; and
	(b) withdraw their approval in relation to any agreement at any time before the agreement is entered into.
	(7) The agreements to which a Passenger Transport Executive for a passenger transport area in Scotland may become a party with the approval of the Scottish Ministers include franchise agreements under which services are provided which are or include services for the carriage of passengers by railway within that area.
	(8) The Scottish Ministers and the Passenger Transport Executive for a passenger transport area in Scotland must each provide to the other any information which—
	(a) the other reasonably requires for purposes connected with their functions in relation to railways or railway services; and
	(b) is information which it would have been lawful for them to disclose apart from this subsection.
	(9) In this section—
	(a) a reference to a Passenger Transport Executive is to a Passenger Transport Executive in Scotland established under the Transport Act 1968, or to any successor body to such a Passenger Transport Executive established by any Act of the Scottish Parliament or by any Order of the Scottish Ministers or other responsible body;
	(b) a reference to a passenger transport area is to an area so designated in terms of the Transport Act 1968, or to the area covered by any successor body under the relevant provisions of any Act of the Scottish Parliament or of any Order of the Scottish Ministers or other responsible body;
	(c) a reference to a service for the carriage of passengers by railway within a passenger transport area is a reference to a service for the carriage of passengers by railway between places in that area or between places in that area and places outside it which are within the permitted distance;
	(d) a reference to station services provided within such an area is a reference to station services provided in connection with any such service for the carriage of passengers by railway; and
	(e) a reference to a bus substitution service provided within such an area is a reference to a bus substitution service for the carriage of passengers between places in that area or between places in that area and places outside it which are within the permitted distance; and in this subsection "the permitted distance" has the same meaning as in section 10(1)(ii) of the Transport Act 1968 (c. 73) (twenty-five miles)."

The Earl of Mar and Kellie: My Lords, Amendment No. 11 concerns the railway functions of passenger transport executives in Scotland. Before anyone rises to their feet to say that there is only one PTE, we are of course legislating for the future. This legislation is presumably for the future, and so we must take this opportunity, although at present there is obviously only one PTE—that is, Strathclyde.
	The amendment has been discussed with my honourable Scottish friend Nicol Stephen, the Minister for Transport in Scotland, who has told us that he is content with it. Such an amendment to the Bill would have the merit of enlarging, and completing the logic of, executive devolution of rail activities to Scottish Ministers.
	The purpose of the amendment is to transfer legislative responsibility for PTEs in Scotland to the Scottish Parliament. Not to do so would mean that the Bill would create a constitutional anomaly—and a clumsy one at that—which we should aim to avoid. The anomaly would be that if, in future, Scottish Ministers wanted to alter the relationship with SPTE or any other PTEs which may evolve, they would have to seek parliamentary time for their legislation here in Westminster rather than legislating in the Scottish Parliament.
	Straightforwardly, this evening we need to hear from the Minister an assurance that Clause 14 will not be commenced for Scotland until Scottish Ministers have secured the order transferring responsibility for SPTE to Scottish Ministers. I beg to move.

Lord Sewel: My Lords, the noble Earl made an interesting comment when he introduced the amendment. He said that he had had conversations with Mr Nicol Stephen, who, as we know, is the Scottish Minister for Transport, and that Mr Stephen was content with the amendment. That is not quite the same as saying that that is the considered position of the Scottish Executive. I wonder whether it would be possible for the noble Earl to clarify the position of the Scottish Executive, because there is of course a totally different route through which this process should progress.

The Earl of Mar and Kellie: My Lords, the discussions were conducted not by me but by my noble friend Lord Bradshaw, who, unfortunately, is not in his place at present. But I think that Mr Stephen was content in an informal way.

Lord Davies of Oldham: My Lords, I am grateful to the noble Earl, Lord Mar and Kellie, for explaining the concept behind Amendment No. 11. He is correct that the Bill as drafted has provisions which apply to English PTEs but not to the Scottish PTE. However, that reflects the different policy approaches taken in England and Scotland.
	The provisions in Scotland were developed in consultation with the Scottish Executive and reflect the policy approach that Scottish Ministers have decided to take. Nicol Stephen wrote to Alistair Darling only last week to reiterate that the provisions in the Bill relating to Scottish PTEs were what Scottish Ministers wanted. We have ensured that that letter has been placed in the Library of the House. It would seem very much against the spirit of devolution to force Scottish Ministers to accept provisions relating to PTEs in Scotland that they did not want.
	I heard what the noble Earl said about his view of where Nicol Stephen stands on this matter, but we are working from our latest consultation, which my noble friend Lord Sewel also commented on in passing. We are working on the basis of a letter, which is available for scrutiny by all Members.
	However, I recognise that there is an element of difficulty in this area and that there may have been cross currents in the discussions that have taken place. Therefore, I want to assure the noble Earl on the salient point that he made in asking me about this matter. The ability to commence the provisions of the Bill in Scotland at a different time from that in England and Wales includes Clause 14, as he wished. I can confirm that Ministers intend to commence Clause 14 in Scotland only once the Transport (Scotland) Bill and the following order have passed through the Scottish Parliament. The Secretary of State wrote to the Scottish Minister for Transport on 1 April on exactly this point, and that letter has also been placed in the House Library. Therefore, I hope that the noble Earl will feel that he has the reassurance that he thought he needed when proposing the amendment.

The Earl of Mar and Kellie: My Lords, I am very content with what the Minister has said. Ultimately, we were seeking the reassurance that there will be a logical process, and I believe that that is what I heard. Therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 42 [Closures guidance]:
	[Amendment No. 12 not moved.]

Lord Davies of Oldham: moved Amendment No. 13:
	After Clause 42, insert the following new clause—
	"PROCEDURE RELATING TO PUBLICATION AND MODIFICATION OF CLOSURES GUIDANCE
	(1) The Secretary of State must lay before each House of Parliament a copy of any guidance or revised guidance, or modifications of guidance, which he publishes or makes (whether or not jointly with any other person) under section 42.
	(2) The Scottish Ministers must lay before the Scottish Parliament a copy of any guidance or revised guidance, or modifications of guidance, which they publish or make (whether or not jointly with any other person) under that section.
	(3) Any guidance or revised guidance published under section 42 is to have effect, and any modifications of guidance made under that section are to have effect, in accordance with an order made—
	(a) if subsection (1) applies in relation to the guidance or modifications, by the Secretary of State,
	(b) if subsection (2) applies in relation to the guidance or modifications, by the Scottish Ministers, and
	(c) if both subsections (1) and (2) apply in relation to the guidance or modifications, jointly by the Secretary of State and the Scottish Ministers.
	(4) An order under subsection (3) which relates to guidance or revised guidance published, or modifications of guidance made, by the National Assembly for Wales jointly with the Secretary of State or the Scottish Ministers, or both of them, may be made only with the consent of the National Assembly for Wales.
	(5) An order under subsection (3) is subject to the negative resolution procedure.
	(6) If a statutory instrument containing an order under subsection (3) is annulled—
	(a) the guidance or revised guidance, or modifications of guidance, to which it relates is, or are, treated as having been withdrawn, and
	(b) where revised guidance or modifications is or are so withdrawn, any guidance published under section 42 which had effect before the publication of the revised guidance or the making of the modifications is to continue to have effect.
	(7) The withdrawal of guidance or revised guidance or modifications of guidance under subsection (6)—
	(a) does not affect anything done in consequence of the guidance before the withdrawal, and
	(b) does not preclude the publication of further guidance or revised guidance or the making of further modifications."

Lord Davies of Oldham: My Lords, in moving Amendment No. 13, I shall also speak to the other two government amendments in this group. Subsections (1) and (2) of the new clause introduced by Amendment No. 13 require that any closures guidance, or revisions to it, must be laid before both Houses of this Parliament, as well as the Scottish Parliament, as appropriate, depending on whether the Secretary of State or Scottish Ministers or both have a duty to publish the guidance under Clause 42. A draft of the guidance, or the modifications to existing guidance, will already have been consulted on. The document laid before the Parliaments will be the final version, incorporating, as appropriate, any comments made in the course of consultation.
	For the closures guidance or modifications to have effect, subsection (3) of the new clause provides that that can be done only in accordance with an order made by the Secretary of State or Scottish Ministers or the two jointly—again, depending on who has the duty to publish the guidance under Clause 42.
	Of course, the National Assembly for Wales also has a role in publishing joint closures guidance under Clause 42; for example, in relation to Welsh services. Where that is the case, the order bringing the guidance into force can be made only with the consent of the Assembly. Orders made by the Secretary of State or Scottish Ministers or both under subsection (3) are subject to the negative resolution procedure. The Government believe that this is more appropriate than an affirmative resolution in these circumstances, given that there will already have been a wide-ranging public consultation on the draft closures guidance or modifications to it.
	Should the order made under subsection (3) be annulled by either House of Parliament or the Scottish Parliament, then the closures guidance, or modifications to which the order relates, is treated as having been withdrawn. In those circumstances, any existing guidance would remain extant. The Secretary of State, Scottish Ministers and the National Assembly for Wales would have to reconsider the closures guidance or modifications to it.
	From the above, I hope it is clear that this amendment fully meets the Delegated Powers and Regulatory Reform Committee's recommendation; it provides for parliamentary control over the closures guidance and modifications to it both in Westminster and in Holyrood.
	I would suggest that the Government's amendment has a number of advantages that are not found in the approach proposed in Amendment No. 12, which the noble Lord, Lord Bradshaw, declined to move. That amendment would require the guidance to be part of an order. We do not believe that that is appropriate. The closures guidance is essentially a manual, intended to set out practical guidelines about how assessments of closure proposals should be carried out, including the criteria that proposals should meet. It will also include material on how consultations under Schedule 7 to the Bill should be conducted as well as other factors. I believe the House will recognise that it would not be helpful for this guidance manual to be written in the precise language and format that would be required if it were to be part of an order. That is why we have disavowed that approach to the issue.
	We just do not believe that an affirmative resolution procedure is appropriate. Clause 42 requires that the closures guidance, and modifications to it, have to be consulted on in draft. For the initial closures guidance, the Government have committed to making this a very extensive exercise, as set out in the note on the closures guidance provided for Members of the Grand Committee.
	The consultation will be very extensive. It will include rail operators, including freight operators and their representative organisations, passenger representative groups, freight customers, railway funding authorities, national authorities, local authority representative groups and a number of others. All those with an interest will have an opportunity to feed in their views.
	The consultation will take place before the new network modification procedures come into force. I would also expect future modifications to the guidance to go through a similarly comprehensive consultation exercise. I beg to move.

Lord Bradshaw: My Lords, we on these Benches welcome the alterations made in response to representations and the fact that there will be parliamentary scrutiny, albeit of the negative, rather than the affirmative, variety. I reserve judgment on that, partly because I wonder how much notice will be taken of the public representations that will no doubt be made following the publication of the Government's closure guidance.
	I realise that I have only a draft copy, but there are one or two welcome points in it: for example, it says that cost savings that might arise from withdrawing services or closing parts of the network will be important. It also says that cost savings should be as detailed and as accurate as possible rather than being based on broad averages. Broad averages were used in the Beeching closures and, as a result, the money that it was said would be saved was not saved because broad average costs cover a much wider range of activities that were still considered to be necessary.
	There is also provision here for consideration of micro-franchises and other local people running services in the absence not of the main franchisee but of someone else. Another operator could step in to provide the services which otherwise it was proposed to close. In those circumstances, I hope that the Government will consider leasing the track to such an operator on a peppercorn-rent basis or something similar, as operators are never going to be able to take on very large-scale costs.
	However, I ask the Minister to ensure that in these assessments care is taken to use plain English which people can understand. I am afraid that I have been associated with the railway for a long time—back to the days of Beeching. I have attended closure proceedings and the obfuscation which surrounded them was manifest. The documentation used in support of them was more to confuse the people rather than to enlighten them. I ask that plain English is used in all these matters so that people can understand what the Government are saying. Otherwise, I welcome the changes made by the Government and I am sure that they will go some way to mitigating the concerns expressed to us.

Lord Sewel: My Lords, perhaps I may ask my noble friend to clarify the wording—not the intention—of Amendment No. 15. It refers to,
	"an order made by the Secretary of State and the Scottish Ministers jointly, means a resolution of either House of Parliament or of the Scottish Parliament".
	I am sure I have this wrong, but the meaning I take from that wording is that the Secretary of State and the Scottish Ministers can be joined together through a resolution of either a House of this Parliament or of the Scottish Parliament, whereas I would have thought it would require a resolution of this Parliament and—rather than "or"—a resolution of the Scottish Parliament. I accept that I may have misunderstood the whole process.

Lord Davies of Oldham: My Lords, I shall deal with my noble friend's last point first to ensure that I deal with it accurately. When joint guidance is produced, a joint resolution will be required.

Lord Sewel: My Lords, so it is not "or", but "and"?

Lord Davies of Oldham: My Lords, at this juncture I can only reiterate that on this point we are addressing it on the concept of joint guidance. I thank the noble Lord, Lord Bradshaw, for his welcome of certain crucial features of the draft guidance. I assure him that, of course, further representations will be welcomed and taken on board. He will recognise the areas where he sees some improvements, and I pay tribute to the fact that he identified those weaknesses in Committee and emphasised that it would be advantageous for certain concepts to be identified in different terms. I am grateful to him for that and for his continuing interest in this area.
	On the more general issue, he will recognise that I am prepared to accept his plea for plain English. We are all in favour of plain English on all occasions. The problem with plain English at times, as our lawyers are prone to tell us, is that it may not have quite the degree of accuracy that is sometimes necessary, both in legislation and in guidance. I want to reassure the noble Lord. He has laid this complaint presumably against my department, the Department for Transport. In falling short of the highest standards of plain English on occasions, I just say that it is not alone.
	Many other departments can be open to this challenge. We all bear the cross which the noble Lord urges us to bear; namely that on occasions we shall get complaints about complexity on issues which are genuinely complex. He will recognise one in particular, which is the whole question of costs and cost-benefit analysis, where jargon creeps in. I agree with the noble Lord that unless the legislation is in plain English he will not be satisfied and I shall not understand it.

On Question, amendment agreed to.
	Clause 55 [Powers exercisable by statutory instrument]:

Lord Davies of Oldham: moved Amendments Nos. 14 and 15:
	Page 57, line 34, leave out "and"
	Page 57, line 36, at end insert ", and
	( ) in relation to an order made by the Secretary of State and the Scottish Ministers jointly, means a resolution of either House of Parliament or of the Scottish Parliament."
	On Question, amendments agreed to.

Drugs Bill

Baroness Scotland of Asthal: My Lords, I beg to move that this Bill be now read a second time.
	The Bill before us today is a tightly focused package of measures that aims to steer people away from a life of crime and into treatment, while making tougher powers available to the police and courts to deal with those who refuse to turn their backs on drugs.
	I am grateful for the wide measure of cross-party support for the large majority of the provisions in the Bill. I hope and expect that your Lordships' House will wish to continue the constructive dialogue that was evident during the debates in the other place. That is not to say, however, that there are not differences of opinion on the precise detail of some of the clauses, nor that we should not properly discharge our responsibility to scrutinise carefully the legislation that comes before this House.
	The Government's drugs strategy is firmly focused on reducing the harm that illegal drugs cause to society at all levels. We are tackling the problem from every possible angle, and are reducing the supply of drugs that enter the United Kingdom, while educating our young people about the harms caused by drugs, in order that they do not ever become problematic drug misusers. Where people have become involved in misusing drugs we aim to get them into treatment, and away from crime.
	Our strategy is having a marked impact. Drug dens are being closed and local drug markets are being disrupted. Operation Hatch is compelling evidence of the success that we are having in tackling drug dealing in our cities. This multi-agency, undercover operation targeted class A drug dealers in Humberside. Drug-using communities were infiltrated and high-quality evidence of drug trafficking was gathered. Since January 2004 the operation has resulted in hundreds of people being arrested and charged, with total custodial sentences in excess of 600 years being meted out.
	I must also note that class A drug use by young people has stabilised since 1998 after years of increase; and 54,000 more people are in treatment compared with 1998. Those very people are being diverted away from a life of crime.
	The focus of the National Treatment Agency has been on reducing waiting times and increasing capacity with the aim of increasing the numbers of drug users in treatment. Its programme for increasing the numbers in treatment has been successful and the NTA will now be working on improving effectiveness and retention of drug users in treatment services.
	The latest National Drug Treatment Monitoring System (NDTMS) data showed that 90,500 individuals either successfully completed treatment in 2003-04 or were retained in treatment on 31 March 2004. The NTA will be building on that progress.
	The Government announced in 2004 that they are to increase their investment in drug treatment from £253 million in 2004-05 to £478 million by 2007-08. The NTA will be using some of these funds to enhance treatment effectiveness by: continued improvement in the quality of drug treatment provided; improvement and expansion of the case management of drug misusers including supported access to social integration services; and ensuring that the needs of women and black and minority ethnic groups are being met within services that are planned and provided.
	We must not underestimate the challenges ahead. To stay one step ahead of drug barons we need to ensure that we have the right structures in place and the necessary, but proportionate, powers at the disposal of the police and courts.
	We know that there is no room for complacency and that we must continue to build on the successes we have seen to date. That is why our strategy for the next three years will drive us to further reduce the availability of drugs and put even more drug dealers out of business. In order to do that we need to tackle production in source countries and disrupt international traffickers along with regional drug barons and local street dealers.
	We shall continue to improve the education available for young people and will expand the routes into support and treatment services for the most vulnerable. We are also increasing the provision, quality and effectiveness of treatment, including in prisons. The Drugs Bill is a key part of that strategy, and was informed by the concerns raised by the police about the powers they need to tackle street-level drug dealers, and by the consultation that was carried out last summer, following publication of Policing: Modernising Police Powers to Meet Community Needs.
	The majority of the measures within Parts 1 and 2 of the Bill are specific, targeted powers that will help the police tackle the problem of street-level dealing of class A drugs. I propose to take a little time in opening because I know that a number of issues have caused concern to noble Lords. I wish in opening to deal with them as fully as I can.
	In Clause 1 we stipulate that a court must treat dealing on or within the vicinity of school premises at a relevant time, or using a person under 18 as a courier, as an aggravating factor when considering the seriousness of the offence of supply committed by an adult. The aim of the provision is to protect children from exposure to drug dealing while they are attending school, and more generally.
	The Sentencing Guidelines Council has issued excellent guidance, which courts "must have regard to" when deciding on the seriousness of an offence. Those list, among other aggravating factors, "deliberately targeting vulnerable victim(s)". However, while that would cover supplying drugs to young people on or in the vicinity of school premises, it is unlikely to catch adults supplying to adults in that area. We want to catch such dealing between adults on the basis that it exposes children in the vicinity to a risk and because we want to eradicate such risks from the vicinity of school premises.
	Furthermore, while the guidance is well known to courts, we wish to send a wider message to dealers about how they will be treated should they deal on or in the vicinity of school premises and a message of reassurance to parents, who we know express concern about dealing near schools.
	While the Sentencing Guidelines Council has issued excellent guidance on many matters, including in respect of targeting vulnerable victims, we believe that the issue of dealing in the vicinity of school premises is of such importance that Parliament should issue a benchmark in that respect.
	During debate in the other place much time was spent on Clause 1, in some cases because the Opposition wanted to widen the scope of the clause by extending protection to other places where young people congregate, for example, and on other occasions by introducing amendments that would potentially restrict the scope of the clause by defining in the Bill what we mean by "in the vicinity". I hope that the Government's position on the clause is now absolutely clear. The clause will remain tightly focused on the problem at hand: the protection of children while they are at school and from being used as drugs couriers.
	We have provided examples of the factors that we imagine will be guiding factors for the courts to have regard to when they are considering what constitutes "in the vicinity". But we are clear that it is not appropriate to define in primary legislation what constitutes "in the vicinity", as the term is used without further definition and without problem in other legislation.
	It was also suggested in the other place that we should widen the scope of the provision to make it an aggravating factor for drug dealing to occur on or in the vicinity of school premises at any time. With the greatest respect, there is no benefit to that proposal, because it would effectively mean that someone dealing in the vicinity of school premises in the middle of the school holidays, when they were not exposing any school children to the risks of drug dealing, may receive a harsher sentence. Let us be clear that we are protecting children during the time that they are present on school premises. If children are targeted at other times, courts already have discretion to treat the offence as aggravated on the basis that the defendant has targeted vulnerable victims.
	Clause 2 creates an evidential presumption of intent to supply where the defendant is found to be in possession of a particular amount of a controlled drug. The effect is that where the presumption applies, a court or jury must assume that the defendant intended to supply the drug which is in his possession. We intend to make it more difficult for those dealing drugs to claim falsely that drugs in their possession are for personal use.
	The particular level of a drug that will give rise to the presumption will vary from drug to drug. It will be prescribed in regulations approved by a resolution of both Houses. In formulating those regulations the Secretary of State will consult the Advisory Council on the Misuse of Drugs. The thresholds set will be proportionate to the offence of possession with intent to supply the particular drug in question, to ensure compatibility with the European Convention on Human Rights.
	Clause 3 amends Section 55 of the Police and Criminal Evidence Act to allow a court or jury to draw such inferences as appear proper, should consent to an intimate search be refused without good cause. Currently, a person's consent is not required under Section 55 of PACE for an intimate search to be undertaken. Its purpose is to enable those in possession of controlled drugs to be brought to justice by deterring those who conceal them in body cavities from withholding consent without good cause, and enabling courts and juries to act should they do so. Clause 4 makes similar provision for Northern Ireland.
	Clause 5 enables a police officer of at least the rank of inspector to authorise an X-ray or ultrasound scan of a person arrested where he has reasonable grounds for believing that the person may have swallowed a class A drug that he had in his possession with intent to supply. Its purpose is to give police an indication of the need to detain someone to allow drugs to pass through their body. Clause 6 makes similar provision for Northern Ireland.
	The Criminal Justice Act 1998 provided for a magistrates' court to commit a person charged with possession of a controlled drug or a drug trafficking offence into the custody of a customs officer for a period of up to 192 hours. That period of detention is designed to enable the recovery of evidence. Clause 8 gives magistrates similar powers to remand a person upon charge to the custody of a police officer, for a period of up to 192 hours.
	For the avoidance of doubt, I make clear that Clauses 1 and 2 apply to England, Wales, Scotland and Northern Ireland. Clauses 3 and 4, taken together, apply the provision regarding drug offences searches to England, Wales and Northern Ireland. Similarly Clauses 5 and 6, taken together, apply the ultrasound and X-ray provision to England, Wales and Northern Ireland. Clause 8 also applies to England, Wales and Northern Ireland.
	Let me briefly explain the powers in the other parts of the Bill. The powers that provide for testing on arrest and follow-up assessment will help us identify those who are misusing drugs at an earlier stage in their contact with the criminal justice system, allowing us to steer them into treatment and away from crime as soon as possible. Police will be given a power to request a person who has been arrested in certain circumstances to provide a sample for the purposes of testing for specified class A drugs—heroin and crack/cocaine—and, where a person tests positive for such a drug, will have a power to require those persons to attend an initial and follow-up assessment of their drug misuse. Where the assessor conducting the initial assessment does not consider it appropriate to require the person to attend the follow-up assessment, that second requirement will cease to apply.
	Since anti-social behaviour orders were introduced, they have become a vital tool. The new civil intervention order that we seek to introduce will allow us to continue tackling the underlying causes of a person's anti-social behaviour. A court will be able to impose an intervention order in the interests of preventing a repetition of the person's anti-social behaviour. The order can direct the person to take part in activities prescribed by an appropriately qualified person that will help to address their substance misuse issues.
	Clarifying the status of fresh magic mushrooms as a controlled drug will, we hope, decrease the trade in a harmful and hallucinogenic drug that is on a par with LSD.
	I anticipate that the issue of cannabis is likely to be raised by noble Lords during this debate. As noble Lords will be aware, cannabis was reclassified to a class C drug on 29 January 2004. My right honourable friend the Home Secretary wrote to the chair of the Advisory Council on the Misuse of Drugs, Professor Sir Michael Rawlins, on 18 March to ask the council to conduct a comprehensive assessment on cannabis and its association with mental health problems. My right honourable friend wanted to be clear what influence the evidence presented in the more recently published studies had on the overall assessment of the classification of cannabis.
	The Advisory Council on the Misuse of Drugs had considered possible links with mental illness prior to reclassification. It concluded that there is no proven causal link between cannabis use and the development of mental illness, such as schizophrenia, although cannabis use can unquestionably worsen a mental illness which already exists. Heavy cannabis use can produce a psychotic state, although this is in most cases short-lived. The use of cannabis should be discouraged in all people with mental health problems.
	Since the Advisory Council on the Misuse of Drugs published its cannabis report in March 2002, it has continued to monitor new cannabis studies. It will consider further studies such as the Ferguson report from New Zealand published in March. The Advisory Council on the Misuse of Drugs will agree its terms of reference of the review at its next meeting on 19 May and arrange its work programme. It is intended that the council will have concluded its assessment by its November meeting.
	I hope that your Lordships will agree that it is vital that young people, in particular, are fully aware of the harms of taking drugs and can access the relevant information. The Home Office, in conjunction with the Department of Health and the Department for Education and Skills, have been developing a series of health messages around cannabis use through the FRANK campaign, with which I know that several noble Lords will be familiar. It is part of a broader communications programme targeting 13 year-olds to late 20 year-olds to communicate the mental and physical health risks associated with cannabis use. Other elements to the programme include targeting heavy and frequent cannabis smokers. The Government have been working closely with mental health organisations to produce materials for sufferers, carers and health professionals.
	I should also mention the matter of the plant khat, which is known to be misused primarily within Somali communities in the UK. It is a plant which, when chewed, has an effect analogous to amphetamines. Khat suppresses appetite and is connected to problems of insomnia, anxiety and aggression. It is not a controlled drug under the Misuse of Drugs Act 1971. The communities affected typically have high levels of male unemployment, low educational standards and high levels of poverty. Recent reports suggest a hidden issue of domestic violence. Excessive khat use can lead to psychotic reactions, although mental health issues among the Somali community are complex and can be related to post-traumatic stress.
	The Government are very concerned at the social damage that khat misuse has on those communities. During the Committee stage of the Drugs Bill in another place, the Opposition tabled a new clause to control khat as a class A drug. In Committee, on 3 February, the Drugs Minister undertook to refer the matter to the Advisory Council on the Misuse of Drugs and subsequently wrote to the chair of the council, Professor Sir Michael Rawlins, to conduct an assessment of whether there was a case for making it a controlled drug. We will await the deliberations of the Advisory Council on the Misuse of Drugs, which are expected before the end of the year. Khat does not fit the profile of other drugs, as its misuse is restricted to one or two ethnic groups. Its potential to become a controlled drug should be considered in that context.
	I am aware of the special interest that the noble Lord, Lord Adebowale, has in the issue of khat misuse, as part of his wider interest in all matters relating to substance misuse. The care organisation Turning Point, which he heads, has recently published an excellent report detailing the social impact of khat misuse. The report's conclusions will be fed into the considerations of the Advisory Council on the Misuse of Drugs.
	This Government have a strong record of success in tackling drugs. We are seizing considerable amounts of drugs that enter the country. We are disrupting those gangs that peddle drugs and spread misery. More drug misusers are entering treatment and being retained in treatment programmes. Our comprehensive programme of work for the coming years will ensure that such success continues. This Bill will better equip the police and courts to tackle street-level drug dealers and steer people into treatment and away from crime. I commend the Bill to the House.
	Moved, That the Bill be now read a second time.—(Baroness Scotland of Asthal.)

Baroness Anelay of St Johns: My Lords, I find myself opening for the Opposition on a Home Office Bill for the fourth time in fewer than five weeks. The Government are behaving like a disastrous DIY addict, hurling paint at the wall in the hope that some of it might stick. Perhaps in the next few days we shall see.
	The noble Baroness has already referred to the fact that there has been cross-party agreement on the principles behind the Bill and much of its content. In the constructive frame of mind adopted by my honourable and right honourable friends in another place, I shall, like the Minister, take some time in opening the debate to give as full a picture of our position as I may. But the noble Baroness will notice from the speakers' list that I have not burdened any of my colleagues with making a winding-up speech, because I thought that it was improper in these final hours of this Parliament to take up that time. If something urgent arises, perhaps I may intervene during the noble Baroness's response, but I suspect, given some of the explanations that she has already given, that that will not be necessary.
	We welcome much of the Bill. We support it because it is a step in the right direction, albeit far too small a step. Drugs wreck lives—not only of users but often of their families, too. There are more than 4 million users of illegal substances in England and Wales and more than 1 million users of class A drugs. Cocaine use is up by 250 per cent over the past eight years and ecstasy use has doubled. Drug abuse among the young is increasing. British teenage boys top the European league of cannabis users. The BBC reported last week that we are now known as the cannabis capital of Europe, an accolade that we could well do without.
	Cannabis is not a harmless drug. Super-potent varieties have emerged in the past 20 years. It can be a dangerous psychotropic drug that can do a great deal of harm. Scientific evidence continues to show a heightened risk of mental illness for those who use cannabis regularly. A recent report suggested that someone who starts using cannabis at 15 has more than four times the risk of developing schizophrenia as someone who starts at 18—not that I recommend starting at any age.
	Marjorie Wallace, head of the mental health charity SANE, said last month:
	"Far from being a relatively harmless recreational drug, for vulnerable teenagers the innocent spliff, or chilling out, could trigger a journey of life-long disintegration".
	I welcome the fact that, at last, the Government have announced that they are rethinking their downgrading of cannabis from class B to class C in 2004. The noble Baroness laid out the case for why the matter has been referred to the Advisory Council on the Misuse of Drugs. We all await the result of that report.
	As the Home Secretary recognised in a Written Answer when he was in another guise at the Home Office:
	"It is undoubtedly the case that most users of class A drugs, such as heroin and cocaine, started off by using so-called soft drugs, normally cannabis".—[Official Report, Commons, 31/10/00; col. 430W.]
	Drug smuggling continues apace. It is estimated that seizures account for only about 10 per cent of the drugs coming into the country. The price of heroin has more than halved since 1995. Crack can be bought in some areas for £10 and ecstasy for £1. Cocaine used to be so expensive that only so-called society users could afford it. That is certainly not the case now; it is within the reach of just about all.
	We know that, all too often, the cost of drug dependency for all of society is crime. Drug-related offences have risen by a quarter in the past three years alone. The Government acknowledge that about 70 per cent of acquisitive crime is drug-related. About 75 per cent of hard-drug users commit crime to obtain drugs, and persistent drug users who are offenders commit almost 10 times as many crimes as people who do not use drugs. Against that backdrop we would have hoped for a Bill that struck deep at the heart of the problem. Here we have one that makes a gentle stab at some of the issues. It is welcome but we would have liked to see more.
	I am grateful to the Minister for her care in clarifying a confusion that arose in another place. She referred to how the Bill will affect Northern Ireland and Scotland in particular. That was most helpful.
	Clause 1 provides for the supply of drugs to children on school premises or in the vicinity of a school to be considered as an aggravating factor when sentence is determined. Nobody could argue with the Government's intent, but I am still not convinced that the route that they have adopted will be the most effective or appropriate.
	There are a couple of other solutions, one of which the noble Baroness has dealt with in considerable detail today: why would not the Sentencing Guidelines Council be the most appropriate route? I listened very carefully to the noble Baroness's remarks. Before her explanation, I still felt that the Sentencing Guidelines Council was the appropriate group to do the job on the basis that it does it in respect of other offences and that it could adequately meet the needs here. But I hear what she says: the current issue is that they have a guideline on deliberately targeting vulnerable victims, and the Government are concerned that thereby one would not catch adult-to-adult trading within the vicinity of the school, where a child could be exposed to that activity—whether the child is connected with that adult or just an observer. That is why the Government seek to create a parliamentary benchmark in this respect. It may be a persuasive argument and so I will not take the matter further today. If we return to the matter in Committee, I might adopt that argument for a more softly-softly approach, just to tease it out. The Minister may have persuaded me on that point.
	I am interested that in Clause 1 the Government have turned their back on an alternative route. They have fought shy of creating an offence of aggravated supply. Accordingly, the jury will determine whether or not the defendant is guilty of the offence under Section 4(3) of the Misuse of Drugs Act 1971. The judge will then determine whether either of the aggravating conditions is met. That is not necessarily a problem. But it is highly unusual to specify in statute the features of the offence that will aggravate the sentence but not to create a specific aggravated offence. Will the noble Baroness say why the Government have decided against that more normal route? As I say, I do not find an objection—this may work—but it is a different approach, which needs to be justified.
	I accept what the noble Baroness said about vicinity. She said that there was a great deal of debate in another place. Since we had our all-party meeting with the noble Baroness, I have looked at other statutes. I accept that there are difficulties in defining "vicinity" and that there may be valid reasons for wanting to have later definitions that are more flexible. So, if we were to get to Committee stage, I would not pursue that point any further.
	With regard to the trading of drugs to children, the Government have missed a golden opportunity to tackle the wider threat. Perhaps they should consult the Sentencing Guidelines Council on extending the aggravating factor to dealing to children in other areas where it is certain that dealers might expect to find them—of course, another place covered dealing, for example, on transport to school, including buses, and at youth clubs.
	So far, the response of the Government has been to say, "Ah, but we have specified schools because there is a legal requirement to be there". I look beyond that. I look to see where children can be found and where they are a vulnerable target. I seek to protect them in those places.
	Justice points out in its helpful briefing—in fact, it is so helpful that it is the only organisation that has had time to brief noble Lords: I think that most organisations believe that since this Bill must be dead, there is no point in telling noble Lords anything—that it is,
	"concerned that the clause has not been drafted so as to properly address the mischief of involving children in the drugs trade. For example, the clause would not apply to cases where children had been employed in the preparation or wrapping of drugs, or where children were being sold drugs on or near premises such as youth clubs or their homes".
	I pray its argument in aid, but it also adds the issue of children who are employed in the preparation of drugs for sale. So there is still something to be tackled beyond Clause 1.
	Clause 2 establishes a presumption of intent to supply where the defendant is in possession of a particular amount of a controlled drug. We agree that it would be helpful to clarify the point at which the quantity of drugs in a person's possession becomes over and above that which should be reasonably held for personal use. The problem is that the clause does not achieve that. The Government have set themselves an almost impossible task and I appreciate their difficulty.
	The clause gives the Secretary of State the power to define the amount for different drugs in different ways by means of regulations subject to statutory instrument. Is that really satisfactory? It is always easy to pick holes in arguments, but this one is a kind of lace, a web. For example, there will have to be a certain arbitrariness built into that procedure. Where should you draw the line? If the prescribed amount for ecstasy tablets for personal use is 25, 50 or 100, why should having 26, 51 or 101 make you an automatic supplier in the absence of other evidence to the contrary?
	Another problem is the circumstance in which drugs are possessed. Suppose that the prescribed maximum for personal use is 25 tablets of ecstasy. According to the Bill, it may be okay to have 25 tablets at home—not according to me, again I have to say—but what if you have them with you at a night club? Would not that circumstance lead one to believe that it is unlikely that you had them with you for personal use? Surely that shows some of the straightforward defects in the drafting of Clause 2.
	I also find the approach of the Government in Clause 2 intriguing for another reason. They have provided for only an evidential burden. That burden will be quite easy to discharge if a defendant simply goes into the witness box and says "I did not intend to supply"—end of story.
	Of course, prior to the existence of Clause 2, the defendant would not be required to give evidence. So the impact of Clause 2 is—where the defendant is proved to have more than the maximum prescribed quantity of drugs in his possession—if the defendant wants to avoid a conviction for supply, he will be obliged to give evidence himself or to call other evidence. In fact, there will not be others—it will be him or nothing. I find that intriguing. In our usual discussions about forcing defendants to give evidence, it is an interesting development.
	We welcome the provisions of Clauses 3 to 6 and 8 that give the police and the courts new powers to tackle drug dealers who swallow or conceal drugs on their bodies to avoid arrest. They are a practical move forward. But why have the Government set the age for testing for class A drugs for those over 18? Why not seize the opportunity to extend the testing to those under 18? What guidelines will be put in place to ensure that people are not requested to undergo more scans or X-rays than would be safe? What about pregnant women or others for whom an X-ray could be hazardous?
	What kind of care programme do the Government intend to put in place for those who test positive? Under the current arrest referral scheme, the Government's research seems to show that 97 per cent of those interviewed failed to make it into effective treatment. The drug treatment and testing order seems to have only a 28 per cent completion rate.
	Clause 20 expands the use of anti-social behaviour orders. It provides for a new order that can be made alongside an ASBO when drug misuse has been the cause of the behaviour that led to the ASBO being made. We believe that that proposal deserves attention—but also proper use and implementation. If we have a Committee stage, we would want to look at the Government's commitment to rolling this out to everyone who needs it. According to the Explanatory Notes, at the moment the Government are planning for only about 100 intervention orders a year, which is a very tiny amount when one takes into account all those who could benefit from it.
	Clause 21 makes a reasonable clarification of the law in respect of magic mushrooms. I have learnt more than I ever thought I wanted to about them. Whatever form they are in, they are to be classified as class A drugs. That is sensible. We will wait to see whether that is implemented. Apparently there is a very strong import trade in them. I wonder what will happen to that particular trade.
	The Bill is also a story of missed opportunities. It does not tackle the dealing of drugs to young people effectively enough. We would like to see further development on that. It does not give us more effective punishment of those who deal in drugs repeatedly, time and time again, as the Private Member's Bill promoted by my honourable friend Nigel Evans would do. It does not require residential rehabilitation of those who take drugs.
	It does not take the opportunity to deal with the problem of khat. I listened with interest to what the Minister had to say. I respect the fact that the matter has now been referred to the advisory council. As long ago as November 1998 I asked the Government why they did not take action on khat, considering the reports of the Home Office itself at that stage on the widespread use of khat in London and the impact on social problems, particularly domestic violence.
	The Government said that they would keep it under review. Perhaps they will understand that I am a little cynical that there will be another review. But the fact that it has gone to the advisory council will, I hope, give it the proper status that it deserves. I hope that the noble Lord, Lord Adebowale, will address the issue of khat.
	Those missed opportunities are matters to which we should return on another occasion. In the mean time, the achievement that can never be undervalued is not one achieved by any of us—either the Opposition or the Government. It is the achievement of people up and down the country who work tirelessly to help those who have fallen foul of drugs. I would like to conclude my remarks with my thanks to them for their counselling, assessment, referral and advice, and for through-care teams in prisons, drug action teams, general practitioners and the extensive voluntary sector. It is their contribution to society that is both admirable and invaluable.

Lord Dholakia: My Lords, I thank the Minister for introducing and explaining the provisions of this Bill. I accept much of what the noble Baroness has said, and it makes sense. Perhaps I may add that I also endorse much of the concern expressed by the noble Baroness, Lady Anelay. At some stage, I hope that we will have sufficient time to deal with the issue in much more detail. But I suspect that we are back to the unreal situation.
	It is not controversial—it has the support of all parties—but it is important to bear in mind that, despite the fact that we give our broad support, it is dangerous to cut corners on legislation of this kind. The Bill is before us and it is right that we give our considered views on a matter that has seriously affected the pattern of crime in this country. Various attempts have been made to rationalise our policy on drugs and drug users. On the matter of drugs and the law, opinions are divided, and they will remain divided.
	The increasing availability and use of illegal drugs, along with large-scale alcohol abuse, are contributing to crime in our society. Systematic monitoring of our criminal justice system demonstrates example after example of the link between drug abuse and crime to pay for drugs. The public debate on this subject is often emotive. Frequent studies reveal differing and conflicting views. The report I have found most convincing is the report of the independent inquiry into the Misuse of Drugs Act 1971 chaired by Lady Runciman. It is an authoritative report based not on assumptions but on hard facts resulting from discussions held with some of the foremost experts and professionals in the field.
	The public are concerned about drug abuse and its consequences. Communities are blighted by drug users and dealers. I shall quote from a letter received this morning by my noble friend Lord Avebury from a resident of Soho:
	"We all know that drugs are endemic to the late night so called 'clubs' attracting a clientele mainly between the ages of 14 and approx 30. We all of us also know that there is an entire ecosystem that grows up around and in connection with these premises, from dealers to wholesalers to people who 'rent out' space in and around the premises late at night, who offer other sundry services and indeed a panoply of activities all of which are illegal and many of which are dangerous and most of which ruin the amenity of an area".
	The frightening aspect of this letter is the extent to which drug users and dealers threaten the residents of an area.
	These concerns will not go away. It must be accepted that there is a drug dependency culture and that it cannot be swept under the carpet. It is exploited by drug barons and dealers whose sole aim is to make money, irrespective of the harm caused to other people, particularly young people. In many countries, laundered money is used to buy arms to support wars around the world. It is a fact that large communities are often displaced, which adds to poverty, despair, and then results in refugees seeking asylum elsewhere. The issue of drugs is a serious problem which requires serious consideration. I am glad that the Home Office has at last seen fit to produce this legislation.
	During my days as a magistrate in Sussex, I came across many young people who had a detailed knowledge of drugs. The same could not be said for their parents. There is a wide gap between the solutions sought by parents and the knowledge possessed by young people.
	This Second Reading gives us an opportunity for an informed debate. In essence, but with some reservations, we support the Bill. If pushed hard, we would welcome a code of practice on extended police powers so that there is no doubt of the outcome of police action. That is because we have to confront these difficult issues with a view to seeking solutions. The Bill goes some way to providing those answers.
	The Drugs Bill is timely. But let me go back to the Government's response to the Runciman report. They missed the opportunity to modernise our drug laws and they ignored the balanced, research-based evidence, thus missing the opportunity to ensure better and more effective use of resources. I have no doubt that public opinion is comfortable with open and honest discussion.
	Research carried out across Europe demonstrates that we in the United Kingdom are increasingly out of step with developments in drug law. Often this has caused serious confusion in the minds of the public. The police seem to operate different standards in different parts of London. It is time to ensure absolute clarity on the part of the Metropolitan Police on this subject.
	On the one hand we want to adhere to international conventions, but we refuse to follow the example of other countries where there is greater flexibility within the rules. Belgium and Portugal focus on drugs as public health issues with prevention and treatment as key tools, placing less dependence on the criminal law. It is a shame that the Government's long-term strategy for tackling drugs to build a better Britain has had poor results.
	Let us look at the targets that have been set up: halving the number of young people using drugs, especially heroin and cocaine; halving the number of reoffending drug misusers to protect our communities from drug-related anti-social and criminal behaviour; doubling drug treatment measures and halving the availability of drugs on our streets, especially heroin and cocaine. But we still trail behind in drug treatment models in our penal institutions.
	There has been improvement, which is welcome, but we have a long way to go. A substantial reallocation of resources is needed to provide more treatment facilities. We cannot ignore the fact that the number of offences committed by addicts is reduced by one-fifth when proper treatment is available. We therefore welcome the emphasis on introducing new measures to deal with the problems caused by the misuse of controlled drugs. We also welcome the measures designed to break the link between drug use and crime.
	Those who target or peddle drugs to our children must be subject to harsher sentences. However, in the past I increasingly witnessed as a magistrate the harsh sentencing of mules who bring drugs to our shores while the real culprits are hardly ever caught. So I hope that the Serious Organised Crime Agency, which we will be talking about tomorrow, will make good progress in identifying and prosecuting drug barons.
	There are matters relating to police powers set out in Part 2. We want to scrutinise these to ensure that they are not simply prescriptive. They must be proportionate and not discriminatory in their use. This is not the time to go into the detail, and I do not intend to address the Bill clause by clause. However, I want to raise two points clearly identified by the Joint Committee on Human Rights.
	As the noble Baroness, Lady Anelay, pointed out, the Joint Committee has rightly questioned the statutory assumption about intent to supply when the possession of controlled drugs rises above a certain quantity in relation to Article 6(2) of the ECHR. The second matter concerns the use of X-ray, ultrasound or intimate searches which may not be compatible with Article 6(1). I want to add to the comments made by the noble Baroness and say that this is an issue where cultural sensitivities are also vital. The Joint Committee offers safeguards to overcome some of these concerns and I hope very much that they will be incorporated either in the Bill or in the Minister's response to the debate.
	The points raised by the Joint Committee are endorsed by RELEASE and the Transform Drug Policy Foundation:
	"We believe that the Bill is overly focused on criminal justice interventions that have a poor record of effectiveness. Arguments presented by the government to support these measures specifically around deterrent effects and reducing availability are not evidence based".
	I shall be delighted to hear what the noble Lord, Lord Adebowale, has to say on this matter.
	"Some clauses risk breaching the Human Rights Act 1998, especially Articles 6 and 8, which provide the right to a fair trial and the right to respect for a private life".
	Equally, we would like to see systematic monitoring to ensure that police powers do not have an adversarial effect on dealings with persons from ethnic minority communities.
	I am glad that the Minister at the Home Office, Caroline Flint, has gone some way in amending the Bill to ensure that the provisions of Clause 1 apply to any school premises, including any ancillary school building and playing fields. There are, of course, issues that one needs to tease out, but I am broadly satisfied with the amendments proposed.
	In conclusion, when we see the Bill again, let us hope that it is a product of adequate consultations with key stakeholders in the drugs field. It is nice to have a slogan, "Tough on drugs", but the effect of any legislative measures must make a real difference where drugs and the stability of our community are concerned.

Lord Adebowale: My Lords, I declare an interest as chief executive of Turning Point, a social care organisation that works with approximately 120,000 people a year. We see 70,000 people with substance misuse challenges, 30,000 young people aged between 16 and 25 and significant numbers of people with mental health and substance misuse challenges. Your Lordships will forgive me if my comments range across substance misuse and mental health issues, but they do come into the debate somewhat.
	I thank the Minister for her remarks about Turning Point's report on khat. It is an issue that has been of great concern to me personally, having lived in the East End and seen the effects of khat on the Somali community and others. I also thank the noble Baroness, Lady Anelay of St Johns, for her complimentary comments—I think that they were complimentary anyway—and for her views on khat.
	The research on khat use found that a drug used socially and without a great deal of effect in Somalia and other countries becomes problematic for many ethnic communities in this country when combined with unemployment, social exclusion and other factors such as discrimination and poverty. That is an important factor that should not be forgotten in the debate about classification and legal structures, to which I shall refer later.
	It becomes a problem particularly for heads of families. Previously, they used khat for an hour after work; now they are unemployed and unable to find work, and they use khat throughout the day and often late into the night. Its use by young people is clearly unacceptable in communities in Somalia but is increasingly common among those communities in the UK. I will happily make the report available to all Members of the House.
	Although it may seem to be an answer to classify khat as a class A drug—the immediate response is it is dangerous so why not give it a class A classification—I am not sure that arresting the head of a Somali family already stricken by poverty and discrimination and placing him in the middle of the criminal justice system will help. The thrust of Turning Point's research and report was to ensure that governments provided appropriate treatments for such communities and looked at the context in which khat was abused as well as at the drug itself.
	It should be fairly obvious to most people that classification is not the answer. By all means let us attack those who seek to corrupt communities and our young people. It is hard to argue with a drugs Bill that seeks to protect children—there is nothing wrong with that—although the points raised by the noble Baroness, Lady Anelay of St Johns, warrant further consideration. If we are going to protect children, let us make that protection comprehensive, effective and more than a gesture to concern and emotion—although when people talk about drugs, emotion and hyperbole are often evident.
	Perhaps I may place a few thoughts before your Lordships without going through the Bill in great detail. The Government's Drugs Bill outlines a raft of new criminal justice legislation on drugs. It is clearly the case that the criminal justice system has a role to play in reducing drug-related crime and getting drug users into treatment. Turning Point's services are doing just that. Together with other colleague organisations, we are delivering the objectives of the Government's drug policy every day as part of our daily work.
	There is much on which we should congratulate the Government in their approach to drugs and their determination to root out the evil people who have no respect for members of the community. Both Turning Point and Drugscope were keen to produce a response to the Bill. The noble Baroness, Lady Anelay of St Johns, referred to Justice, but it was not the only organisation to produce a fast response to the Bill. We were out there and, should anyone think we have been slow on the uptake, our advice is available.

Baroness Anelay of St Johns: My Lords, as I said, I regret to say that the briefing from Justice was the only one received by my Front Bench. I am not aware of any of my colleagues receiving other briefings. I did not chase up the noble Lord, Lord Adebowale, because I appreciated that we would have the benefit of his advice today. However, it is disturbing.
	I do not blame any organisation for not getting its briefing out to noble Lords. I believe that organisations simply were caught out on timing and considered that at this stage of the game the Bill would not be going anywhere. I had no intention of criticising organisations for not getting briefings to us.

Lord Adebowale: My Lords, I thank the noble Baroness for that intervention, and I take her point. However, there is available a joint briefing on the Bill produced by both Turning Point and Drugscope. I shall refer to some of the points contained in it.
	A report produced by Turning Point looks at the routes into treatment and expresses the concern that there is an increasing emphasis on criminal justice responses to illegal drug misuse. That may have some rather perverse effects on treatment and its availability and the incentives to get into treatment for the very people we seek to help. The key priority for any government should be to focus on making treatment more effective, rather than just creating new offences aimed at getting people into treatment in the first place.
	It is critical that the right people are placed on the right programmes at the right time. It is a difficult challenge but it is one that I shall continue to push governments to keep in mind. It is easy, in a sense, to make law; the difficulty is to keep people in treatment. It is worth reminding the House that the Audit Commission's recent report estimates that 34 per cent of drug users who leave treatment drop out in the first 12 weeks. According to the National Audit Office, of those offenders who received a community sentence in 2003—this was referred to in previous contributions—only 28 per cent completed the programme.
	The challenge for organisations involved in the delivery of drug treatments is to improve those statistics and those outcomes. The question that I wish to put to the Government is: how does the Bill help to achieve those improvements specifically? I am not sure how the proposed measures in the Drugs Bill will lead to an improvement in the success rate of referrals into treatment or to a reduction in drop-out rates on community sentences. A key challenge for the Government must be to re-examine the structure, design and delivery of community sentences.
	There are three specific provisions proposed in the Drugs Bill about which Turning Point and Drugscope have reservations. In regard to drug testing at arrest, it is felt that the emphasis has been placed at the wrong point in the pathway in order to provide what is hoped might be a quick-fix solution. It may be that the focus should have been on strengthening existing voluntary schemes, such as arrest referral, rather than creating a new criminal offence with drug testing at arrest.
	We need to work towards a national arrest referral service that is user-focused and consistently applied across the country, drawing upon best practice, knowledge of what works and simple changes such as the provision of pre-booked appointments for treatment, accompanying clients to appointments and assertive outreach. Many such measures are more effective ways of actively getting people to attend voluntarily and engage in drug treatment for longer. The measures should be available to all drug users, not only a few. They may not sound as macho as longer sentences or greater punishment, but they have proven to be effective. That is the point.
	Secondly, I should like to comment briefly on proposals to create a new offence through a presumption of intent to supply when a person possesses a particular amount of controlled drugs. There are practical difficulties in setting a precise figure for the amount of drugs possessed to constitute the new offence. I also question whether it would help in targeting dealers, as many would systematically exploit the new offence by ensuring that the amount of drugs held by them at any one time was conveniently below such an amount. We must remember the incentive that many dealers have to meet changes in law with equally devious changes in practice. So I doubt whether the measure will be successful in targeting the dealers who cause most harm.
	I also have some reluctance in supporting the new offence that elevates quantity of possession in isolation from other factors such as the variety of drugs found, evidence that the drugs were prepared for sale, evidence of large amounts of money in the possession of the defendant or evidence from documentation such as recorded transactions.
	Finally, I want to comment on provisions giving a court the power to supplement an anti-social behaviour order with an intervention order. Initially, the new order will address only drug-taking behaviour. I agree that some people behave anti-socially because they misuse drugs and/or alcohol. Getting the right interface between anti-social behaviour and treatment is critical. Access to effective forms of treatment is essential to enable people to sustain a change in their behaviour. We should not forget that people who are labelled anti-social often have a high level of vulnerability and a range of complex needs. That means working with people to meet their support needs and tackling and changing the causes of their behaviour.
	I have considerable concerns about how the interface between anti-social behaviour orders and intervention orders will operate in practice as a tool in addressing behaviour. The Bill does not define appropriate activities, who will be responsible for deciding what amounts to an appropriate response to the trigger behaviour or who will provide or supervise the appropriate activities. It is crucial that we begin to tackle the long-term causes underlying anti-social behaviour and focus our energies on a range of support, from drug prevention and early intervention to prevent drug use becoming problematic and a nuisance and entering the criminal justice system in the first place.
	In looking at young people's drug use, I should like to comment on some of the points raised about cannabis, given the Home Secretary's decision to review its classification, the intense media speculation and the fact that it was debated so intensely in the other place. The current situation in the UK regarding cannabis reveals a confused vision of reality. The legal acrobatics that the Government have performed over cannabis may be questionable. They resisted classification when the excellent Runciman report was published. They reclassified when the popular mood seemed to change but applied a maximum of 14 years' imprisonment for supplying the drug, despite other class C drugs carrying a five-year maximum.
	If new evidence emerges to show that cannabis is more harmful than thought, it will have to be considered carefully. Fifteen months on from the reclassification, I am not convinced that there is enough new scientific evidence to warrant a review. When the Advisory Council on the Misuse of Drugs recommended reclassification, it fully considered the evidence that cannabis can trigger mental health problems, which I shall come to shortly. I should also make it clear that the views expressed today are my own, rather than those of the ACMD, of which I am just one member. There are 36 members of the ACMD, and I shall not try too hard to persuade the other 35, who are very learned pharmacologists, of my view.
	I am surprised that the Government are asking for a review so soon after reclassification. Available evidence suggests that cannabis usage among young people has remained stable since reclassification. That might not feature greatly in the headlines in the tabloid press, but there is evidence that it has even fallen among 11 to 15 year-olds. A new study by the Independent Drug Monitoring Unit in the UK has found that the increase in regular use fell to 0.5 per cent in 2004, compared with 45 per cent at its peak in 1998. Reclassification has not led to a sudden leap in use, as was predicted. Those are the facts.
	If we are concerned about the impact of cannabis use on mental and physical health, why should its classification be the main focus of the debate? Surely, hauling young people before the courts as a result of their cannabis use cannot be seen as reasonable treatment. Indeed, in spite of reclassification, we forget that in this country cannabis still attracts one of the highest penalties compared with the rest of Europe—two years for possession and 14 years for trafficking. I am not sure that a more punitive law, as a result of reclassification, will help young people or people who suffer from schizophrenia and may be self-medicating in their use of cannabis, to receive treatment.
	We need to be aware of all the facts and to encourage intelligent discussion. Cannabis is a drug that can have detrimental effects, particularly on those who are especially vulnerable to mental illness. But when cannabis is compared with other drugs against criteria such as mortality, toxicity, addictiveness and its relationship with crime, it is less harmful to the individual and society. That is why it is a class C drug. I think that that is understood by the public and by many young people.
	The evidence of the drug's long-term effect on mental health is not so clear cut. No doubt we can find professors on either side of the argument who will say that smoking cannabis causes schizophrenia, and in recent days it appears that the media have done just that. The Advisory Council on the Misuse of Drugs considered such research in depth during its deliberations, but concluded that no clear causal link had been demonstrated. However, the council was clear, as was mentioned earlier, that cannabis use unquestionably can worsen an existing condition of schizophrenia.
	It is true that cannabis may exacerbate mental health problems in people with a pre-existing mental illness. But so will poverty, so will worklessness and so will social exclusion. Cannabis is easy to blame, but cannabis alone is not to blame.
	Any review of the evidence must be led by fact and not fuelled by misconceptions or existing prejudices. In particular, the current media portrayal raises real fears around the impact on those from black and minority ethnic—BME—backgrounds. It is shameful that stereotypes still influence the diagnosis and treatment that black people receive, leading to lack of access to appropriate assessment, treatment and care. All too often, disproportionate numbers of black people are given a diagnosis of schizophrenia and treatment is disproportionately likely to rely on medication and constraint. The growing stereotype of cannabis psychosis, partly fuelled by the media, could exacerbate this state of affairs still further. African or Caribbean people with mental health problems may find themselves labelled with cannabis-induced psychosis, with very little evidence for such a diagnosis. I am not saying that there are no links between mental health and cannabis use, simply that when the reality of those links becomes distorted to the point of stereotype, it can have real and damaging consequences for those who need support, and in this case, BME groups in particular.
	No, the recent debate does not reflect the reality of cannabis misuse in the UK, and that is why I believe that we need a sophisticated and credible approach to this drug. We need to get the message right and get across the facts in a way that is accurate, non-confrontational and relevant to young people's lives. The FRANK campaign started to do this and I would like to see further development of that intervention. Most young people know that cannabis is legal and can be harmful, but we need a much greater focus on drug treatment, education and prevention.
	Finally, I am also doubtful—and I think we should be very doubtful—that cannabis is the gateway drug, an often repeated idea. There is more evidence that shows that alcohol and cigarettes act more frequently as gateway drugs in comparison with cannabis. Indeed, when I talk to many of the people whom Turning Point sees each year, they talk not about cannabis, when one examines their drug history, but about going to the pub, having a drink, having their inhibitions relaxed and then being introduced to cannabis. If we are going to talk about gateway drugs, let us talk about all the gateway drugs, including alcohol and cigarettes. In any event, it is not the use of the drug that encourages people to move to harder drugs but the existence of a single drugs black market.
	It is concerning that the Government's own schools inspectorate criticised the level and standard of drug education in some schools. I want to see that reversed and much more attention paid to it. So I suggest that we move on from the debate on cannabis reclassification to concentrate on practical responses to drug misuse. To reclassify or not to reclassify should not be the question. Instead, we need to redouble our efforts on communicating the real evidence-based harm of cannabis and the known impact on health through a targeted and significant public health campaign.
	Our approach to substance misuse should include the criminal justice system. Equally, it should include an assertive and effective treatment programme in the community.

Lord Mancroft: My Lords, I will refrain from asking what we are doing debating the Second Reading of a Bill at this stage in the life of a Parliament. To debate a Bill that is going nowhere is a waste of parliamentary time, and if this Bill has a future it will be without any scrutiny; and if ever there were a Bill that needed scrutiny, this is it.
	I have long held the view that any policy issue on which the two main political parties are in broad agreement—there are not many—needs to be viewed with the utmost suspicion. What to do about drugs is one of those policies. Governments of both hues have followed the same basic policy in respect of what we now call the drug problem for over 30 years and in particular since the enactment of the Misuse of Drugs Act in the early 1970s.
	Indeed, the Government's first policy document, produced by the shortly to be banished drug tsar, was a continuation of the policy introduced by my right honourable friend Michael Howard, when he was Home Secretary under John Major. That drug strategy document contained a number of targets by which we in Parliament, and the British people at large, could measure the Government's performance.
	In the revised drug strategy, published by Mr David Blunkett, shortly before his high moral stance catapulted him out of the Home Office, sensibly omitted those targets. It was sensible because virtually none of them had been reached, or showed the slightest chance of being met, apart from a few marginal matters. The reason for that is very simple—I am not making a party-political point. It is because the central plank of this Government's drug policy—like that of all those governments before—is completely rotten. It has not worked, it cannot work, and it will not work.
	The policy of prohibiting drugs by use of the criminal law, the foundation of which is the Misuse of Drugs Act—is entirely understandable and indeed laudable in the context of the 1970s. But 30 years later we can see that it is a colossally expensive and unbelievably destructive failure. The sole purpose of the Misuse of Drugs Act was to reduce and eventually eliminate drug use by means of prohibition and the criminal law, but it has not exactly been an overwhelming success, has it?
	Year on year, since then, we have seen drug use and the harm associated with it, rise, inexorably, to a level that nobody in their worst nightmares could have imagined in the 1970s. More than that, with the exception of the occasional small hiccup in the graph—which might or might not be the stabilisation in opiate use mentioned by the Minister—overall there has been no drop in the use at all; in fact the increase shows no real sign of decelerating.
	Home Office commissioned research from the University of York a couple of years ago put the cost to the UK taxpayer of drug misuse at £12 billion to £18 billion per year and 80 per cent of that amount is the cost of crime and the criminal justice system: from which we derive no benefit whatever. This Bill, in the dying days of the Parliament, does nothing except hold out the prospect of a further increase in that cost, without any real hope of a benefit. It is a further, deeply unpleasant compromise of the criminal justice system, in the hope of demonstrating a greater commitment to being tough on drugs.
	It seeks subliminally to persuade us that the police and customs services, the courts and the prisons, have not really being trying for the past 30 years, and that one more tiny adjustment, one more civil liberty chucked on the scrap-heap, will suddenly make all the difference. The day that this little Bill is enacted, all those junkies will simply throw up their hands and cease their filthy habits and the sun will shine on a drug free world. That will not happen. In practice, the criminal justice interventions that are proposed in this Bill have been shown to have a very limited effect. The Government's arguments in relation to the deterrent effects in reducing availability are not supported by evidence.
	Some of your Lordships may recall that I have an interest in this subject. I have been chairman of the Addiction Recovery Foundation for 15 years, chairman of the Drug and Alcohol Foundation for almost 10 years and chairman of Mentor UK, which is the leading drug prevention organisation in this country, for nearly six years. I have also had the honour of being for almost 13 years vice-chair of the All-Party Parliamentary Group on Drugs Misuse. It is amazing that they still keep me on. However, in my experience there has been little consultation with the individuals and organisations that I have worked with and know and which work closest with drug addicts and relevant offenders across the country. There is virtually no support for the Bill except from those organisations that have a direct interest in promoting the existing policy.
	I will say a little about the human rights aspect of the Bill and in particular draw your Lordships' attention, as have other noble Lords, to the Select Committee's Seventh Report, and ask your Lordships to reflect carefully on whether the Bill's dubious benefits justify reversing the burden of proof, risking the fairness of trials and ignoring the respect that we are meant to have for private life. I have my doubts. Of course, others may disagree, but, either way, these are the issues that should be carefully debated in the Committee stage, which I suppose this Bill cannot have.
	I must, too, draw your Lordships' attention to the Select Committee's comments about the "inadequacy" of the Bill's Explanatory Notes. The report states:
	"This does not inspire confidence that human rights compatibility has been a matter of central concern in the formulation of the policy or the drafting of the Bill".
	That is a pretty damning comment from a Select Committee.
	Putting aside the overall objectives of the Bill, there are within it a number of specific measures which, apart from the fact that they are unlikely to have any major positive effect on Britain's worsening drug problem, will cause a great deal of harm to individual drug addicts, who are among the most vulnerable and socially excluded people in society—they are ill people in need of healthcare receiving the sort of treatment that would not be acceptable if meted out to healthy members of society. If we were to have a Committee stage, I would also want to look closely at those aspects of the Bill.
	Lastly, I would draw the House's attention to the Government's proposal to place what are commonly known as magic mushrooms in class A alongside heroin and cocaine, under the Misuse of Drugs Act. Magic mushrooms have been around since time immemorial, and have varied in popularity since the 1960s. They have a mildly hallucinogenic effect on users—not, as the Minister said, anything equivalent to LSD. That may or may not be desirable, depending on your point of view, and my view is that it is not desirable. What matters, however, is that they are neither physically nor psychologically addictive, cause negligible side effects and, unlike what the Minister said, cause virtually no harm. There is no evidence of harm and there is no evidence of their causing any public order problems. In those circumstances, to make the possession of wild mushrooms; that grow throughout the United Kingdom, do little discernible harm, and are currently legitimately retailed through hundreds of shops and across Europe a criminal offence equivalent to heroin is really the most disproportionate suggestion in a badly thought-out, badly drafted Bill. My noble friend on the Front Bench called it sensible but I cannot agree.
	I could say a great deal more about many aspects of the detail of this Bill, but I agree entirely with what the noble Lord, Lord Adebowale, said in relation to cannabis. The debate on that has got completely out of proportion partly because of the Government's mishandling of the reclassification process, which was correct but was so mishandled that it has caused the problem and has given ammunition to a deeply irresponsible press. That is where we are, but we need not go into that night. I have probably said enough.
	I would not dream of dividing the House on Second Reading, but I look forward to the early demise of this Bill, and I trust that the Government will not waste your Lordships' time with this kind of proposal again. Politicians in this country are too keen on telling us all how tough they are on drugs. When I go around the country and talk to school teachers, people who work in the field of drug misuse and, most of all, parents, I find that they are not interested in people who are tough on drugs. They merely want an effective government. I look forward to that too because we do not have that at the moment.

Lord Cobbold: My Lords, I wish to concern myself with just three aspects of the Bill. The first is Clause 1, which deals with the aggravated supply of controlled drugs and inserts a new Clause 4A into the Misuse of Drugs Act 1971. The proposed aggravating factors are, as we have already heard, that the supposed offence was committed on or in the vicinity of school premises or that the offender used a courier who was under the age of 18 or a third party to transport cash.
	Although those may seem logical, it is already the case that sentencing judges can and do take aggravating circumstances into account during sentencing, and guidelines already exist to assist this process, as the Minister said. I therefore wonder why, in these circumstances, the proposed legislation is really necessary.
	The second and more serious aspect relates to Clause 2 and the proof of intention to supply a controlled drug. This clause amends Section 5 of the Misuse of Drugs Act 1971 creating a presumption of intent to supply where the sole criterion is that the defendant is found to be in possession of a quantity of a controlled drug which exceeds a specific quantity that is to be arbitrarily fixed by Home Office regulation. This has the serious effect of reversing the burden of proof, so that the onus is now on the defendant to establish that he or she is not a dealer. It seems to me that this clearly undermines the fundamental principle of human rights that anyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.
	The result of implementing this legislation would be an increase in wrongful convictions of individuals guilty of nothing more than possession for personal use of an amount of a controlled drug that exceeds the arbitrary limit set by the Home Office.
	The third aspect of the Bill that I wish to address is also the most controversial. It is Clause 21 which proposes to classify so-called "magic mushrooms" as class A drugs. As I have stated in your Lordships' House on a previous occasion, I am one of those who believe that current prohibition policies are contrary to common sense. I echo the feelings of the noble Lord, Lord Mancroft, in this area. I believe that drug usage should be decriminalised and subjected to regulation, quality control and taxation, as is the case with alcohol and tobacco.
	The point at issue is to what extent do any government have the right in a free society to interfere in the personal choices of individual citizens and, with the excuse of protecting their health for their own good, to impose criminal sanctions on anyone who disobeys the rules?
	In their recent White Paper entitled Smoking Kills, the Government state that they are,
	"determined not to infringe upon people's rights to make free and informed choices".
	The classification of magic mushrooms as class A drugs would fly in the face of that commitment.
	A government have every right and indeed a duty to educate and warn the public of the risks and potential dangers to health of all drugs, including alcohol and tobacco. Indeed, the campaign against smoking in recent years is a good example of what can be achieved by publicising potential harm to health. But thereafter a government's concern and use of the criminal justice system should be the prevention of harm to others. Drug or alcohol addiction in itself is a sickness requiring treatment. It should be criminal only when an addict resorts to harming others to sustain his supply.
	Magic mushrooms grow wild all over England. Will the owners of farmland, gardens and public parks become criminals for possessing class A drugs? The prospect is absurd. What about other substances that are damaging to health? Sugar and chocolates in excess are harmful. Beef burgers and chips can lead to chronic obesity. Should these substances also be made illegal?
	The classification of magic mushrooms as a class A drug will merely force the trade under ground and into the hands of professional criminals and will further increase the burden on the already overstretched criminal justice system. I hope very much that this clause can be dropped from the Bill.

Baroness Falkner of Margravine: My Lords, we on these Benches will indeed use the opportunity to wind up although I hope that I will not burden noble Lords too long with my remarks and shall be exceedingly brief.
	As my noble friend Lord Dholakia and the noble Baroness, Lady Anelay, have pointed out in their compelling references to the harm inflicted by drugs, we too believe that this Bill addresses serious social concerns and therefore broadly welcome it.
	As regards the issues around young people, I myself am a parent of a child in an inner-city school, and although my child is still at primary school, we, and many other parents and teachers worry about an increasing trend towards drug supply around the school. We also know that we will have to be far more vigilant when we come to this issue in secondary school. There is almost a sense of "Here but for the grace of God we go" in terms of the ongoing trend of abuse over years and decades. We do have some concern, however, whether Clause 1 adequately addresses these issues. As Justice has pointed out in its briefing on this Bill, the provisions would not cover cases where children had been employed in the preparation or wrapping of drugs, or where they were sold drugs in premises such as youth clubs or their homes. The noble Baroness, Lady Anelay, has already touched on that. Were this Bill to go any further, we would take up that matter in Committee.
	I will now address myself to some of the issues that arise with respect to human rights—the Minister will recall that I am a member of the Joint Committee on Human Rights, and would not expect me to do otherwise. Many of these issues have already been touched on by my noble friend Lord Dholakia and by the noble Lords, Lord Mancroft and Lord Cobbold, but they bear repeating very briefly. Clause 2 raises concerns regarding the "reverse burden provision". The implication of this is that if it is proved that the accused is in possession of an amount of the drug which is greater than the amount prescribed in regulations made by the Secretary of State, the court or jury must assume that he intended to supply the drug. While we accept that the Bill allows for exceptions to this where evidence is adduced to the contrary, we nevertheless wonder why the Secretary of State has felt it necessary to introduce this reverse burden provision. Since we do not know what the prescribed amount of possession of the drug is, we cannot know what the amount will be which will trigger this statutory assumption. Hence we cannot know, in scrutinising this Bill, whether this engages Article 6(2) of the European Convention on Human Rights, which is the presumption of innocence. The noble Lord, Lord Cobbold, has spoken eloquently on this and we echo his concerns.
	At Part 2 we welcome the introduction of the requirement that intimate searches for drugs may be undertaken when the person to be searched has consented. This is a welcome improvement on the current situation, and enhances human rights.
	However, the provisions in the Bill at Part 2 for the drawing of adverse inferences from a refusal to consent to an intimate search or an X-ray or ultrasound scan may well go in the other direction and raise questions with regard to the right to a fair trial—Article 6(1) of the European Convention. The JCHR in its report on this Bill suggests that courts, when deciding whether there is a breach of Article 6, will take into consideration what safeguards are in place to ensure that the person is fully aware of the consequences of staying silent and that excessive weight is not placed on that silence by the court or the jury. We wonder whether the Minister can tell us in her response about those concerns and about what safeguards the Government intend to put in place in this regard.
	The noble Baroness, Lady Anelay, touched on the issue of carrying out X-rays and ultrasound scans on pregnant women or on those who may have other medical conditions for which the scans could be harmful. There is also the issue of the ethics of imparting medical treatment without the consent of the person to be treated. We see contradictions in the government approach regarding Part 3. The principle is introduced in Part 2 that consent must be given for certain actions. In Part 3, that is taken away. Hence, the accused is forced under threat of criminal sanction to undergo treatment. That raises Article 6 issues of the right to a free trial. We do not question the motives of the Government in this regard, and we appreciate that the intention of the Government is to try to get more drug users to undertake treatment. However, looking at the Government's own statistics in this area, one gets the impression that there is no need for criminal sanction for people to undertake treatment. The Minister has reiterated tonight that an increased number of people are taking up treatment—she said it was 54 per cent more than a few years ago. If that is correct we welcome it, and we exhort the Government to pursue those sorts of approaches rather than criminalising citizens who have not been charged with an offence.
	Then we have the issues of compulsory testing on arrest, compulsory assessment of misuse, and intervention orders, which all engage the right to respect for private life in Article 8 of the European Convention on Human Rights. Other issues have been raised, including the possibility of classifying khat, about which I know quite a bit having lived in the Middle East. I remind noble Lords that the Yemeni community, in addition to the Somali community, uses that drug extensively. The classification of cannabis and magic mushrooms has been raised, which needs to be looked at.
	We have maintained here and in the other place that we have no doubt that drugs are a serious and growing problem in society. The last time an overarching, joined-up assessment was undertaken of the problem and how to deal with it, was in the context of the Misuse of Drugs Act 1971. It has now been 34 years since that legislation, and a new generation of people's lives have been affected by this problem; yet we are just tinkering with the system. Is it not time to take a long, non-partisan look at what needs to be done?
	While we support the Bill, we do so in the hope that if the Government are re-elected they will take a fresh look at the many issues involved, undertake meaningful consultation and carry out a comprehensive, overall review of drugs policy.

Baroness Scotland of Asthal: My Lords, I thank all noble Lords who have participated in the debate. I say immediately to the noble Baroness, Lady Anelay, that I wish to associate myself entirely with the comments that she made at the end of her speech in the plaudits that she rightly gave to all of those who work so hard in the rehabilitation of those who have been addicted and therefore ruined by the abuse of illicit drugs.
	I understand the concern that has been expressed, most particularly by the noble Lords, Lord Mancroft and Lord Cobbold. I know that there are those who take a perfectly legitimate and proper view that the decriminalisation of all classified drugs would be the better course to take. I understand the arguments that they powerfully make in support of that contention, but each noble Lord will know that that view cannot be concurred with by Her Majesty's Government, for the reasons that I gave in opening and because of the nature of the consequences of so doing. I say to both noble Lords that this attempt by the Government does not fail to take into account the pernicious nature of drug abuse and the need for treatment; it is the reverse. It is the Government making clear that we fully understand that drug misuse is a health issue as well as a criminal issue. The thrust of the Bill is to try to address the demarcation between the two, so that those who are so sorely in need of treatment are better able to get it at an earlier stage, when intervention may be the most effective way of guaranteeing it.
	I shall now address the specific issues raised by the noble Baroness, Lady Anelay, and the noble Lord, Lord Dholakia, supported so ably by the noble Baroness, Lady Falkner. Each of them raised issues about how Clause 1 would work. The noble Baroness, Lady Anelay, asked with her usual care why we did not have an aggravated offence. We have been clear that the jury are the determiners of facts, such as where the defendant was and whether the matters complained of against him have been made out in terms of quantity of drugs, location and transactions.
	However, in relation to the sentencing, it is the proper role of the judge to say whether those matters were aggravating features, having taken them all into account. Additional matters may have to be borne in mind. The group attacked or targeted may have been a vulnerable group, so you have the element of vulnerability with that of location and the nature of the past-offending pattern of behaviour. The court will have to determine how far to go with treatment, punishment by way of detention, and rehabilitation. All those factors will be properly within the judge's purview. The better course would be, having set the template before the judge in an appropriate way, to allow the judge to exercise that discretion.
	The noble Baroness and others, including the noble Lord, Lord Cobbold, turned to Clause 2. Why have a presumption? I want to be clear that it is an evidential presumption. It is not a change in the burden of proof. The presumptions are rebuttable, but all other factors can be taken into account. Noble Lords will know that, on many occasions, it is asserted on behalf of a defendant that substantial quantities of drugs were in his possession for personal use. It is amazing on occasion what quantity of drugs can be purported to be available for personal use.
	The classification that we propose has the help of the medical services, which are able to judge—drug by drug—an appropriate benchmark. As noble Lords will know, each drug will differ, so it would be unsafe and unsatisfactory to prescribe a limit that would apply to all and implement it in terms of legislation. I hope that I made it clear in opening that, before the drugs are so identified, the Government will seek the advice of the Advisory Council on Misuse of Drugs. The level that will give rise to the presumption will vary from drug to drug. It will be prescribed in the regulations approved by a resolution of both Houses. The Secretary of State will consult, and your Lordships can be sure that he will give great weight to the advice that he gets from the advisory council. The evidential presumption of intent where the defendant is found to be in possession of a particular amount of controlled drugs is no more than that.
	I am sure that the noble Lords, Lord Mancroft and Lord Cobbold, know full well that Clause 21 clarifies the law on magic mushrooms. It does not necessarily reclassify magic mushrooms as class A drugs. Noble Lords will be familiar with the debate that has gone on for a long time about dried and fresh magic mushrooms, and why one is bad and the other one is not. That part of the Bill clarifies the position and, if I may respectfully suggest it, makes a little more sense of it than was so before. The Bill makes an important contribution.
	Issues troubled noble Lords about the nature and content of the examinations that would be brought about—the sensitivity that would be needed in terms of the cultural issues. I assure them that we are conscious of that importance. It does not mean that all such refusals will immediately be seen as culpable. What is important is lack of good cause. If there is good cause for refusal, no offence will be committed. It will be a question of fact. Those matters will be important to remember.
	We have had much discussion about the use of cannabis and whether reclassification was or was not right. I assure the noble Lord, Lord Adebowale, and others that the work that has been undertaken to inform young people better, particularly in relation to the FRANK campaign, will continue. It is important that we continue to look at the empirical evidence that we have available in relation to this and every drug, because the development of our policy must be founded on fact, not hyperbole or rhetoric. I thank the noble Lord, Lord Adebowale, for his kind compliments in relation to the efforts that have been made by the Government to refocus drug policy.
	I should also reassure the noble Baroness that the comments made by the noble Lord, Lord Adebowale, in terms of the use of cannabis were correct. Cannabis use among young people is not rising. The Schools Survey of 2004 shows that the use of cannabis by 11 to 15 year-olds has fallen from 13 per cent in 2003 to 11 per cent in 2004. The British Crime Survey shows slow but steady decline in the use of cannabis by 16 to 24 year-olds. In 1998 it was 28.2 per cent and has fallen to 24.8 per cent.
	Of course we need to do more, but it is not the case that this is a problem that is going up and up. So we must be responsible in the way that we look at this matter and it is right, notwithstanding the fact that it was only recently referred back to be looked at again, for us to look forward to the November indication of whether the classification that we made was correct.
	Other issues include residential rehabilitation, raised by the noble Baroness, Lady Anelay. She well knows that this is only one type of treatment. Not all of those rehabilitating from drugs will need rehabilitation in a residential setting, but it is necessary for those who are most amenable to it and to whom it will best apply. In relation to Article 6, raised by the noble Baroness, Lady Falkner, I hope that the comments that I have already made in relation to the rebuttable presumption have answered her points.
	I shall now deal with some of the other issues that were rightly raised by the noble Lord, Lord Adebowale, on the importance of concentrating on rehabilitation. The Government agree with him that it is important. Protecting the health and welfare of the British public is central to the Government's thinking. Taking up a point made by the noble Lord, Lord Cobbold, legalisation of currently illegal drugs would run counter to the Government's health and education messages as well as to the aims that they seek to achieve by their drug strategy. It would not eliminate the need for prevention, treatment, education, information, advice and harm minimisation—all matters that were raised by the noble Lord, Lord Adebowale, and which have significant and ongoing costs attached to them.
	Legalisation could be expected to attract substantial commercialisation. Legitimate businesses would endeavour to encourage demand for their products in their quest to maximise profit. There would be no reduction in drug-related crime and there would remain an illicit market. So I hope that noble Lords would accept that a regulated market through controlled outlets would not, we would respectfully suggest, eliminate illicit supplies, as alcohol and tobacco smuggling amply demonstrate.
	The Government's reaction in relation to testing is an important addition. It has been suggested, including by the noble Lord, Lord Adebowale, that we should strengthen existing voluntary schemes, such as arrest referral, rather than creating what is referred to as a new criminal offence involving drug testing at arrest, and that we should work towards a national arrest referral service which would be user-focused and consistently applied across the country, drawing upon best practice.
	I can reassure the noble Lord, Lord Adebowale, and the House that we are strengthening the existing voluntary arrangements by putting in more resources and integrating arrest referrals into drug intervention programmes. Arrest referral is a key gateway into the through care and after care provided by the criminal justice integrated teams. Arrest referral and other drug workers work in partnership with, or increasingly as part of, those teams. The voluntary arrangements are already national as they operate in custody suites throughout England and Wales and are available to all drug misusers following arrest.
	Our current statement of expectations makes clear that the examples of good practice, which I know have been cited by the noble Lord, Lord Adebowale, today and at other times, should be in place to develop nationally along with many other examples in order to engage individuals in treatment most effectively. Therefore, drug testing on arrest is not a new criminal offence. Rather, Clause 7 provides a power to request an arrestee to provide a sample. The arrestee will commit an offence only if he refuses to provide such a sample without good cause. The introduction of testing at an earlier stage in the process, combined with the requirement to attend an initial and possibly follow-up assessment following a positive test, aims to increase the proportion of those testing positive who attend an assessment. This is the key step towards engaging in the treatment and support, which I know the noble Lord recognises as being essential to changing behaviour and sustaining that presumption.
	I hear what the noble Lord says in relation to ASBOs. We understand the interconnection between those issues; the importance of identifying the needs of young people; obtaining for them the help and support to divert them from crime and anti-social behaviour; making sure that there is early intervention in relation to drug treatment; and that the treatment is a more useful tool than incarceration or other forms of intervention, unless the behaviour means that it can be dealt with in no other way.
	I wish that we had a little more time because I want to say a little more about how the changes we have in the criminal justice system have helped the better co-ordination. We have created the national criminal justice boards, the local criminal justice boards and the crime and reduction partnerships, and we are the working together with Connexions, non-governmental organisations and drug treatment teams. All that partnership working means that we have created better integration in dealing with children and young people in particular, but also vulnerable young adults who are so often the victims of drugs and drug misuse.
	These issues are complex and the Bill is a helpful addition to all those other steps. It is not a panacea. I want to reassure the noble Lord, Lord Mancroft, that we do not believe that it will fix all. However it will be a helpful contribution in ensuring that the focus is on the helpful treatment, assistance, advice and intervention for those who are addicted to drugs while maintaining a sufficiently and significantly robust line on those who want to take advantage of vulnerability by peddling what I know all noble Lords believe to be pernicious and soul-destroying drugs which limit the humanity which people are thereby able to express. I commend the Bill to your Lordships.
	On Question, Bill read a second time.

House adjourned at twenty-nine minutes past eight o'clock.
	The first Written Statement was submitted on Thursday 24 March but was received too late for printing in the Official Report]